China's “zero Covid” policy is put to the test as new lockdowns threaten to snarl the global supply chain — again
![A temporary isolation facility to house Covid-19 patients near a bridge linking Shenzhen and Hong Kong [Anthony Kwan/Getty Images]](https://cdn.robinhood.com/static_content/mwphzyq69oso/en-US/assets/files/4ddQi6V0zuNJuFvWeJt4OT_1_GettyImages-1384225765.jpg)
![A temporary isolation facility to house Covid-19 patients near a bridge linking Shenzhen and Hong Kong [Anthony Kwan/Getty Images]](data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7)
Déjà vu… As many countries look toward a post-Covid life, China’s experiencing a surge in cases. The spike’s triggered the harshest restrictions since the virus was first discovered in Wuhan nearly two and a half years ago. On Sunday, China quickly acted to curb its 1K+ new Covid cases (a fraction of US caseloads) by closing schools, suspending public transport, and halting non-essential biz in Shenzhen, aka “China’s Silicon Valley.” Now, its 17.5M residents are on a weeklong lockdown.
- Phone problems: Foxconn, which assembles most of the planet’s iPhones, has paused production at its two Shenzhen factories. Apple shares fell nearly 3% yesterday.
- Car trouble: China also locked down all of Jilin province (population: 24M), home to auto plants operated by Volkswagen and Toyota.
Check your pockets… You’re probably carrying a gadget made in Shenzhen. Thanks to its status as China’s first “special economic zone” (think: big tax breaks for foreign companies), Shenzhen grew from a fishing village to a global tech powerhouse over the past four decades. It’s home to Chinese tech giants like Huawei and Tencent, and the world’s fourth-largest port, where China ships off 90% of its electronic exports.
The world’s things are still largely Made in China… The US imported $540B worth of goods from China last year. While many countries are trying to move on to an “endemic” phase of Covid, the world’s second-biggest economy has taken a zero-tolerance approach to any new infection spikes. That’s going to disrupt the global supply chain, already strained from pandemic shortages and, now, a war in Europe. US policymakers are trying to reduce China dependence: the House just passed a $52B bill to boost domestic chip manufacturing, which has been a priority for Biden’s admin.