From Neue Zürcher Zeitung's TheMarket.ch:
Joerg Wuttke, President of the EU Chamber of Commerce in China, is concerned about the state of the world’s second largest economy. The Zero Covid policy has led the country into a dead end.
Few Western observers know China better than Joerg Wuttke. The president of the EU Chamber of Commerce in China has been living in Beijing for more than thirty years. Today, Wuttke is concerned. The 25-million metropolis of Shanghai has been in lockdown for a month, and China’s economy is suffering an enormous slump. «The supply chains are so interlinked that lockdown measures in one place have ripple effects on other regions», he says.
Wuttke urges the government in Beijing to take an example from Singapore, where politics and society have learned to live with the coronavirus. Without success: «In current politics, the business people hardly get through anymore», says Wuttke in an in-depth conversation with The Market NZZ, which has been lightly redacted for clarity.
«China is losing its credibility as the best sourcing location in the world»
Mr. Wuttke, Shanghai has been in lockdown for a month. What's your assessment of the current economic situation in China?
The Omicron wave is like a game of whack-a-mole for China. First Xian was locked down, then Shenzhen, then Shanghai, and so on. Now we're all wondering what’s next. The case of Shanghai is bad. In its own image, it is the best and most advanced city in China; from Shanghai’s point of view, Beijing is province and Xian is a backwater. And then life in this metropolis grinds to a complete standstill. We in the international business community look to Europe and see how a somewhat normal life has returned, because people and governments have learned to live with the virus. Here in China, the authorities always fall back to square one.
The images from Shanghai are reminiscent of Wuhan more than two years ago. What are the implications for the economy?
The current lockdown is even more extreme than in early 2020, and the economy is crashing almost as hard. Just to give you a few numbers: Freight traffic volumes in the Shanghai metropolitan area plunged by 81% year-on-year in the first three weeks of April. Jiangsu province recorded a drop of 30%. Nationwide, freight volumes in April are down 15% year-on-year. There are currently no trains running between Nanjing and Shanghai; the authorities in Nanjing are so riddled with fear that they won’t allow any traffic. In Guangdong province, China’s economic powerhouse, freight volumes have plunged by 17%, even though there is no lockdown. Supply chains within China are so tightly knit that lockdown measures in one place have ripple effects on other regions....
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HT the interview was out: India's Alpha Ideas
