The biggest city in China is locked down — and the groaning supply chain is about to feel it

It’s Day 12… and there’s no sign of Shanghai’s lockdown lifting. Almost two weeks ago, China locked down its largest city and financial capital to contain its biggest Covid outbreak in two years. Since then, China’s zero-Covid policy has brought life to a halt for 26M people, virtually freezing one of the world’s most important manufacturing hubs.

• Drones and robo-dogs are circulating to remind citizens to obey the rules and curb their “soul’s desire for freedom.” Many residents are running low on food because delivery services have been disrupted (and they can’t go to the grocery store).
• Office sleepover: Some bankers are stuck sleeping under their desks and brushing teeth with their coworkers.

Indefinite lockdown, definite damage… Shanghai accounts for 4% of China’s GDP and 10% of its exports, so the lockdown threatens to slow the entire country’s economy. But the rest of the world could be affected, too, since Shanghai is an industrial nerve center.

• Closed factories: Tesla, Volkswagen, and German industrial giant ThyssenKrupp have shut their Shanghai plants for two weeks and counting; production has slowed for 80% of Shanghai-based manufacturers.
• Empty ports: Cargo volume in Shanghai’s port — among the world’s busiest — has dropped by a third since mid-March. Shipping giant Maersk says the lockdown will also reduce trucking in and out of the city by 30%.
• Mounting losses: After this clampdown and a similar quarantine in Shenzhen last month, half of US companies in China have reduced their annual sales estimates.