Think Ahead
Is it feasible for China to continue lockdown and zero covid policy approach?
China has announced its biggest city-wide lockdown since the Covid outbreak began more than two years ago.
China's national health commission reported more than 4,500 new domestically transmitted cases on Sunday. The city of Shanghai will be locked down in two stages over nine days while authorities carry out Covid-19 testing. Authorities had so far resisted locking down the city of some 25 million people to avoid destabilising the economy.
But after Shanghai recorded its highest daily number of cases on Saturday since the early days of the pandemic, authorities appear to have changed course. The lockdown will happen in two stages, with the eastern side of the city under restrictions from Monday until 1 April, and the western side from 1-5 April.
The recent surge in cases in China, although small compared to some countries, is a significant challenge to China's "zero-Covid" strategy, which uses swift lockdowns and aggressive restrictions to contain any outbreak.
The policy sets China apart from most other countries which are trying to live with the virus. This will further dampen the economic growth of global and China itself. Why?
Let me highlight a simple business flow chart assuming company operating in Malaysia.
- Given that raw material required are procured from China, having lockdown or zero covid policy will have significant impact on the delivery timeline and availability of the material.
- If the goods are processed in China, the total lockdown practices involve zero workers working, means any goods processed in the region will be suspended.
- Relevant certification will not be an issue provided port closure.
- For shipment/ custom clearance it will be a major issue, being import and export, the ships are not allowed to port in to affected region bay if lockdown is applied. Ships will be required to float on the sea until lockdown lifted up and only the contena can clear out.
- Payment, I personally have experienced bank couldn’t operate during total lockdown (last time in Shenzhen), this has further strained on the company cash flow (reason: payment term on goods received by customers) if the company need the payment to pay off loan on required timeline or suppliers.
Whatever highlighted above are based on my own live experiences, and not wholly or exclusive applied to all industry. So it is still feasible to have the mentioned approach as it is up to your own discretion.
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1 person likes this. Showing 12 of 12 comments
According to insider tips, Shanghai covid new cases will go down dramatically. Zero covid will happen in May.
2022-04-18 11:52
Strangely, things that i ordered in China move super fast even with lockdown! Where as things i ordered in Malaysia move like forever! Haix, nowadays our productivity is so bad, you can order from a seller 5km away only to get your parcel 10 days later!
2022-04-18 12:52
Admiring a country for its good quality is okay, but worshipping it as a perfect entity is totally wrong.
2022-04-18 19:53
Recently had a chat with a HK fund manager, be it true or not, China is coming with their own covid-pill like Merck US, they will only open borders to all when this covid pill is proven effective.... Of course many hearsays Shanghai is an stronghold of opposition party hence the lockdown.....
Be it whatever reason, I really hope China can adopt a more flexible approach to tackle Covid than zero covid policy.
2022-04-19 20:33
@stockfreak Doesn't seem very likely. Right now new cases are reaching its peak around 20K++ cases a day (asymptomatic and symptomatic). Cases may fall in the coming weeks but unlikely to reached zero Covid in May. Probably mid-June if things goes as planned. Still by May parts of Shanghai should open up while more serious cases remained under lockdown.
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According to insider tips, Shanghai covid new cases will go down dramatically. Zero covid will happen in May.
2022-04-19 20:57
@Tobby Depends on where it is shipped. Most likely from Guangzhou, then it is business as usual lah.
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Strangely, things that i ordered in China move super fast even with lockdown! Where as things i ordered in Malaysia move like forever! Haix, nowadays our productivity is so bad, you can order from a seller 5km away only to get your parcel 10 days later!
2022-04-19 20:59
let's wait for another article from uncle KYY blaming the USA for China lockdown. 期待..
2022-04-19 21:07
CHINA is a 1 billion over population country and in most case live in high density places
COVID is an unusual bio disease NOT from natural sources.
SOME companies requires pre employment health checks some dont
SOME dont mind working in environment whereby coworkers are infected with TB, STD, Hepatitis
Up to individuals standard
2022-04-19 21:12
@nelsonlim Unless the HK fund manager is a the member of the politburo, nobody really knows what goes on in the upper echelon of the Chinese government. Yes there are many hearsay that Shanghai is a stronghold of opposition party, but if you look at previous lockdown experiences in Xi'an (2021) and currently in Changchun (ongoing for more than a month) and many parts of the country, they are really serious with the "dynamic zero" Covid policy.
Still I completely agree with you that they should adapt a more flexible policy for the sake of their economy.
____________________
Recently had a chat with a HK fund manager, be it true or not, China is coming with their own covid-pill like Merck US, they will only open borders to all when this covid pill is proven effective.... Of course many hearsays Shanghai is an stronghold of opposition party hence the lockdown.....
Be it whatever reason, I really hope China can adopt a more flexible approach to tackle Covid than zero covid policy
2022-04-19 21:57
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