Over the past two years, China has adopted a “Zero-Covid” approach to the coronavirus. Rather than acknowledge that Covid will be with us forever as an “endemic” disease, China believes it can beat and eradicate the virus by shutting down huge swathes of its economy when there is an outbreak. Those shutdowns threaten shipping and commerce especially, with the latest outbreak is no exception.
China has reported an outbreak of Covid in the Chinese city of Ningbo, home to a major strategic port and one major part of the Chinese supply chain.
The outbreak comes as two days ago, China confirmed over 30 Covid cases in Ningbo. The Port of Ningbo-Zhoushan is a major port that handled over 365,000 TEUs of cargo since the New Year less than a week ago. If it shuts down due to the Covid outbreak and cannot be staffed, Chinese exports will be affected again on a large level.
Back in August 2021, the Port of Ningbo-Zhoushan shut down after a case of Covid at the port and fears of a widespread outbreak among port workers. Now, cases have increased in the city, making a shut down more likely. Back in August, the port was closed for over two weeks. As of yesterday, no port workers had tested positive yet, a potentially hopeful sign. However, trucking operations in the city are already known to have been affected, as the city shut down many areas due to the outbreak.
The threat of another port shut down in China comes as the supply chain remains overloaded and under close scrutiny.
China appears to have chosen a Zero-Covid strategy instead of putting its business concerns first. Recently, the Chinese city of Xi’an, with 13 million residents, locked down over a Covid outbreak. Starting on December 22nd, the lockdown remains in effect, pointing to the longest period of lockdown since the original virus outbreak in Wuhan two years ago. With the Chinese government under intense pressure to prevent a wider Covid outbreak in the country, all ports are not out of the crosshairs yet. With this in mind, supply chain issues may be further aggravated by the latest developments.