The lockdown of the world's leading container port threatens the global economy.

Shanghai is facing the worst wave of Covid-19 in China since the outbreak began.

Even if no death has been deplored, and the overwhelming majority of cases of contamination are asymptomatic, the authorities have chosen to confine its 25 million inhabitants to their homes, despite a very heavy cost for the economy.

At the gates of the municipality, thousands of heavy goods vehicles are stranded: drivers entering the city must leave to observe a quarantine of at least two weeks themselves wherever they go next in China.

"But the problem is that because of the restrictions imposed on truck drivers (the port) does not really work," says Bettina Schön-Behanzin, vice-president of the EU Chamber of Commerce in Shanghai.

What I've heard is that volumes are down 40% per week at the Port of Shanghai.

It's huge.

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“The cost of the zero Covid strategy will increase significantly”

The port of Shanghai alone handles 17% of China's shipping tonnage.

Any disruption can only slow trade in the world's largest exporter of goods.

Industrialists point out that the repeated confinements from one end of the country to the other are seriously harming their activity.

The epidemic threat weighs on the government's growth target, which is counting on a rate of 5.5% this year, already its lowest target for thirty years.

According to the Nomura bank, no less than 23 major cities representing 22% of Chinese GDP have imposed total or partial containment measures.

“The cost of the zero Covid strategy will increase significantly just as its benefits wane, especially with declining exports,” observes economist Lu Ting of Nomura.

Question about zero Covid strategy

In order to help the most affected sectors, the government announced this week a deferral of social security contributions for catering, tourism and transport.

But industrialists consider the use of confinements excessive, given the low mortality of the Omicron variant.

"Does the zero Covid strategy still work in the current context? Asks Eric Zheng, president of the American Chamber of Commerce in Shanghai.

This is the big question, especially when weighed against its economic cost.

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