Shanghai lockdowns to end, perhaps easing tech supply chain woes

China needs this as much as the rest of the world


China’s largest city, Shanghai, will this week all-but end its COVID-19 lockdowns on Wednesday, and by doing so may smooth some of the kinks in the world’s technology supply chains.

Limited lockdowns commenced in Shanghai during mid-March, before April escalations imposed city-wide restrictions that have remained in place ever since.

Shanghai is a major manufacturing hub, so the lockdowns have caused considerable pain. Cisco, for example, Cisco warned of disruption to supplies of parts it needs for power supplies. The likes of Foxconn, Tesla, and Toyota, have all ceased or slowed production. Chinese chipmaker SMIC kept production ticking over by having staff move either into its plants, or into a COVID-free zone around its plants.

Shanghai city authorities now say they’ve controlled COVID’s spread to their satisfaction and are happy for the city to re-open with few restrictions in districts that have gone 14 days without a detected infection.

At a Sunday press conference, officials said 1,700 “key production-oriented enterprises in the region have resumed work and production,” as have 450 key financial institutions and 580 key foreign trade enterprises.

Local stores and malls are slowly re-opening, and many public transport services have resumed.

City authorities also saw fit to mention that 88 per cent of e-commerce warehouses have resumed operations.

Shanghai’s administrators have also announced subsidy schemes for industries including software development. Free or low cost broadband services for SMEs is another stimulus initiative. Some SMEs will be eligible for free software that it is hoped will accelerate their digital transformation efforts.

The city’s government even hopes that the lockdowns will see businesses accelerate development of digital pandemic-management tools.

Shanghai’s re-opening will be welcome worldwide, but perhaps more so in China as the nation’s economy has suffered during 2022 as lockdowns have hurt local e-commerce giants JD and Alibaba. Demand for smartphones has slumped in 2022, according to data [PDF] from the China Academy of Information and Communications Technology.

Shanghai’s lockdowns have also challenged China’s government by generating dissent that was quashed by preventing the use of certain hashtags that became popular expressions of frustration with the severity and provision of support while the city was under strict controls. Such content was, of course, removed whenever possible. ®

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