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Beijing’s unwavering zero-Covid policy rattles supply chains

With less than a month to go until the start of the Beijing Winter Olympics there is no let up in China’s zero-Covid policy with more and more cities being plunged into lockdown, creating widespread supply chain shocks.

The port of Ningbo-Zhoushan is struggling to shift containers as less than a quarter of registered truckers have the necessary new paperwork to go in and out of the three terminals at Beilun, a district that has gone into lockdown following the detection of a Covid-19 outbreak at a clothing factory over the weekend.

The city of Xian in the west of the country has been under a strict lockdown for a fortnight, while the city of Zhengzhou on the banks of the Yellow River has just ordered its 12m residents to take Covid-19 tests after a handful of cases were detected. The city has gone into partial lockdown while the 1m citizens of Yuzhou city – in the same province as Zhengzhou – have received stay-at-home orders after three asymptomatic cases.

On Tuesday, China reported 41 new symptomatic community cases, including 35 in Xian.

Down south, the leader of Hong Kong today announced further restrictions including a two-week flight ban from eight nations.

A new report out by Goldman Sachs yesterday suggested that China will likely stick with its zero-Covid approach this year, despite most other nations abandoning such a policy.

Reports that vaccines made by domestic firm Sinovac Biotech offer limited protection against the omicron variant will likely reinforce China’s resolve to stick with its Covid Zero strategy, the Goldman Sachs analysts suggested.

With Covid-19 likely to be widespread outside China and with the party congress approaching in the final quarter, the analysts wrote: “We doubt policy makers would eliminate quarantines before then. With transmission typically higher in the winter months, it’s possible that border restrictions could be kept largely intact until spring 2023.”

China’s heavy quarantine rules are seeing Chinese crews – among the most numerous in the global merchant fleet – facing quarantines of up to seven weeks when they return home, while crew changes for foreign seafarers at Chinese ports have become very difficult, exacerbating the crew change crisis.

Credit Splash 24 by Sam Chambers

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