While much of the world has given up on lockdowns as a way of limiting the spread of the highly infectious Omicron variant of Covid-19, China has pushed firmly ahead with its elimination strategy.
And it’s starting to bite.
China’s economic activity contracted sharply in April following a series of lockdowns. Retail sales were down 11.1 per cent and industrial production dropped 2.9 per cent. Both are key measures of China’s economy.
Australia and New Zealand have both pursued a policy of elimination, but eventually gave up with the arrival of vaccines. Even the Kiwis, who were the most stringent on border controls, allowed people to start travelling into the country in April this year.
Shanghai has been in a city-wide lock down for almost two months. But the lock downs are set to cause deep ramifications for supply chains across Europe and China shows little appetite to change its tack.