China Lockdowns Cripples Supply Chains: Top Insights and Global Economic Outlook

For the last three years, the patience of Chinese workers has grown thin due to ongoing lockdowns and rounds of mass testing they had to endure to comply with China’s attempt to keep low Covid numbers. Thousands took to the streets in massive protests across China to loosen the strict Zero-Covid policy which has resulted in major disruptions in manufacturing and factories. With every lockdown, employees are unable to work due to city-wide lockdowns causing suspended operations and production disruptions at leading manufacturing plants such as Honda Motors, Volkswagen-Faw, Foxconn, and more. China’s strict Zero Covid policy has produced potential financial risk for critical manufacturing hubs, with financial impacts on the supply chain equalling $600M. Furthermore, the continuation of these strict restrictions could accelerate companies’ plans to diversify away from China in the mid to long term.