As China continues to face the worst lockdowns in the wake of the massive COVID-19 outbreak in two years, Japan has urged its companies manufacturing in China to opt for domestic production. According to Nikkei Asia reports, Tokyo is fearing an elongated supply-chain disruption that could take place given the stringent lockdown measures implemented in China in order to adhere to the controversial zero-COVID policy. Meanwhile, Japanese multinational firms are looking forward to undertaking broader reassessment provided they are allowed tax incentives and subsidies, the report added.
Growing COVID cases in the largest economic hub of China, Shanghai, has rendered a massive blow to smooth global supply chains. The extended and forced shut down of businesses, and manufacturing hubs like the Changchun city – which has auto manufacturing units of Toyota and Volkswagen- triggered many countries to rethink continuing production in China. For comparison, Shanghai port handled at least 20% of China’s freight traffic, but the Beijing-imposed COVID lockdown in the city has created a major logistics crisis for local as well as global exporters.
China could face ‘grave & complex’ job market: Chinese Premier
China’s second top leader, Premier Li Keqiang warned of a complex and “grave” employment situation in the country as COVID-19 cases in Shanghai continue to spike resulting in the imposition of the most stringent lockdown measures in the world. Painting a grim picture of the potential impact of the sluggish economy on the job market, Keqiang in a statement released on Saturday emphasised the necessity of providing incentives to people in order to encourage them to start small businesses. He underscored that Beijing needs to ensure measures that reverse the dwindling employment opportunities and bring stability.
“Stabilizing employment is critical to people’s livelihood, and is the key support for the economy to run within a reasonable range,” said Li Keqiang, Chinese Communist Party’s no. 2 in the ruling hierarchy.
Keqiang’s comments come as Chinese President Xi Jinping’s COVID-19 measures have left at least 31 cities under full or partial lockdown. The fresh outbreak of coronavirus in Shanghai and subsequent lockdowns have impacted nearly 214 million residents across the country, as reported by CNN.
China doubles down on COVID measures
In a span of two years, the world has mostly learned to live with the virus, taking minimal necessary measures to prevent further outbreaks. However, Xi Jinping has doubled down on his efforts to curb the community spread of the virus by imposing mass testing mandates and lockdowns. He ordered strict adherence to the controversial zero-COVID policy and said would “punish” anyone who opposes or questions it.
This has led to an unprecedented job crisis, with employment rates falling to a critical low in two years. Extended lockdowns in China’s financial hub have brought the world’s largest economy to what Societe Generale analysts have described as “near breaking point.” From the manufacturing and service sector to small scale businesses were all intensely affected by the COVID measures.