Fiona Yua partner at Chinese investment company Northern Light Ventures, who also lives in Shanghai, said locking the door was difficult but manageable. She believes that people can get enough food, if not exactly what they want. “I think most people, especially young people, are willing to go to work,” she said.
But Yu said some of the companies in which she invests have struggled. Some have had to suspend operations because of missing hardware components. Some entrepreneurs have even been forced to sleep in their labs to ensure that important biotech experiments are not interrupted. “They are suffering, but they are doing it,” she said.
Shanghai is a particularly important manufacturer of key components for the automotive and electronic industries, and an important shipping center. Restarting factories will bring income for some workers, but the biggest benefit will be the global supply of products. According to Everstream Analytics, a company that provides supply chain data, at least 249 of the 666 companies decided by the government to reopen are car manufacturers.
China is currently going through some of the most draconian government-imposed measures in the world, as it struggles to maintain “zero-CovidStrategies to fight the contagion Omicron variant of the virus.
Many cities and counties in China partially or fully locked in recent weeks, but the situation in Shanghai, where Covid could have spread before being tackled aggressively, has been particularly dire. Reports appear about residents of one of China’s wealthiest and most cosmopolitan cities hungry and form refuse treatment at the hospital for serious illnesses. The city has seen more than 400,000 Covid infections, a whopping number by Chinese standards, but only 17 deaths, according to official figures – a number some expert questions.
In addition to the hardships suffered by the people of Shanghai, the closures have closed factories and blocked transport links. Hundreds of flights was cancelledroads without truckers required to follow strict testing and isolation rulesand shipping containers stranded at sea. Favorable wind, a company that collates and analyzes shipping data, found in early April that a fifth of the world’s container ships are waiting outside congested ports, with nearly 30% of them waiting to enter ports. China, from Shenzhen in the south to Beijing in the north. As of April 11, there were about 197 ships outside Shanghai and Ningbo, up 17% from a month earlier, according to Bloomberg data.
Shanghai’s struggles could also cause product shortages around the world, further straining global supply chains was severely affected by a combination of factors, including unprecedented demand for goods caused by the pandemic, the trade dispute between the US and China, and most recently, Russia’s invasion of Ukraine.
Even with the government’s efforts, the global electronics industry could be particularly vulnerable by the situation in Shanghai. Julie Gerdeman, CEO of Everstream, said: “Under most realistic scenarios, full normalization of production at key electronics suppliers would only be possible from the start. end of April or beginning of May”.
