What is happening to the Chinese city of Shanghai worries the world

With 17 days since the Chinese authorities closed the Shanghai region, and there is no sign of easing restrictions soon, in light of attempts to contain the outbreak of the Corona epidemic, concern is growing about economic damage and potential shocks due to the suspension of activity in one of the largest and richest cities in the world.

Shanghai, which lies on China's east coast, along with the neighboring city of Kunshan, which closed earlier this month, plays a large role in the global economy.

Analysts note that complete or partial closures in 45 Chinese cities affect a quarter of the population and about 40 percent of the Chinese economy.

The world is closely watching the developments of the epidemic and the closures in the Shanghai region, which keeps most of its 25 million residents trapped in their homes, for at least three reasons, according to an analysis in CNN.

The first reason is that this region is a huge center for business and finance, as it has the largest GDP among all Chinese cities, at $679 billion, and it also has the third largest stock market in the world in terms of the value of companies trading there, after my stock exchange. New York and London have the fifth largest number of billionaires in the world.

Shanghai is the most attractive destination for international business looking to establish itself in mainland China, as by the end of 2021, more than 800 multinational companies have set up regional or country headquarters there, according to city authorities.

The port of Shanghai is the world's busiest for container traffic, with 47 million units of cargo transported through it in 2021, four times the volume of the Port of Los Angeles.

The figure accounted for 16.7 percent of China's total container shipments last year.

Shanghai is also a major aviation hub in Asia, with the city's two airports handling 122 million passengers in 2019, making it the world's fourth-busiest hub, after London, New York and Tokyo.

But the COVID-19 outbreak has caused port delays to get worse, halting many passenger flights, driving up air freight prices and putting more pressure on global supply chains.

Shanghai's port is still operating, but industry data released in late March showed the number of ships waiting to be loaded or unloaded had risen to a record high.

State media also reported that many truck drivers are struggling to get containers in and out of the port on time, due to travel restrictions.

The greater Shanghai area, which includes Kunshan and many other eastern cities, is a major industrial center for industries ranging from automobiles to semiconductors.

Both Germany's Volkswagen and US General Motors operate factories in Shanghai in partnership with a Chinese state-owned company, and the city is also home to a giant factory of US electric car company Tesla.

Tesla delivered more than 65,000 vehicles from its Shanghai factory last month, making it the best-selling brand of electric vehicles in China.

And in January, Ford of America launched the Sixth International Design Center in Shanghai, highlighting the city's vitality and the growing number of young Chinese designers.

The city is also home to the world's largest chip maker, and several major semiconductor manufacturing plants.

But COVID-19 restrictions have forced many factories to suspend operations in Shanghai and Kunshan, threatening to disrupt key automotive and electronics supply chains.

The Volkswagen and Tesla plants in Shanghai have been closed for weeks.

The Chinese company, "Neo", the electric car maker, was also forced to stop production due to the disruptions related to Corona in it, and in other Chinese cities.

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