Shanghai's GDP Expected to Drop by 0.5 Percentage Points in Q1-Q2

Economic Growth Slowdown Inevitable Due to Shanghai City Lockdown
Severe Congestion at Shanghai Port Caused by Labor Shortage...Concerns Over Global Logistics Bottleneck

[Asia Economy Beijing=Special Correspondent Jo Young-shin] Due to sequential and cyclical city lockdowns amid the spread of COVID-19, it is forecasted that Shanghai's economic growth rate in the first and second quarters of this year will drop by 0.5 percentage points compared to the same period last year.

Although Shanghai city authorities have promised sequential lockdowns and as rapid normalization as possible to mitigate economic repercussions, this lockdown measure is expected to have a considerable impact on the economy.

[Image source=Yonhap News]

The state-run Global Times reported on the 29th that Shanghai, a metropolis of 24 million people and a financial hub, will be locked down sequentially for eight days starting from the 28th, divided east and west by the Huangpu River, which could affect Shanghai's economy.

Shanghai health authorities announced abruptly on the night of the 27th that the Pudong area east of the Huangpu River will be locked down for four days from the 28th to the 31st, and the Puxi area west of the river will be locked down for four days from the 1st to the 4th of next month.

The Global Times explained that Chinese health authorities set the goal of maintaining Shanghai's economic momentum while preventing the spread of COVID-19, leading to the decision of sequential and cyclical lockdowns. It also reported that Shanghai authorities intend to control the virus at minimal cost.

Despite Shanghai authorities emphasizing that there will be no economic impact, concerns are emerging that the growth rate will inevitably decline.

Professor Chao Heping of Peking University expressed concerns that Shanghai's sequential and cyclical lockdowns could pressure the secondary industry and affect the service sector. Professor Chao forecasted, "Due to the spread of the infectious disease and the resulting lockdowns, Shanghai's GDP in the first and second quarters will fall by 0.5 percentage points compared to the same period last year."

Last year, Shanghai's GDP was 4.321485 trillion yuan (approximately 826.873 trillion Korean won). Shanghai accounts for 3.8% of China's total GDP (114.367 trillion yuan), a scale large enough to impact the entire Chinese economy.

Chinese media emphasize that despite the lockdown, export-import logistics at Shanghai Airport and the port (Yangshan Port) are operating normally, but the structure cannot escape the lockdown's influence.

Jingyuan Zheng, a researcher at the Shanghai International Shipping Research Institute, stated, "Although Shanghai port is operational, stricter quarantine and inspection requirements have led to manpower shortages and reduced efficiency," adding, "Port congestion is quite severe." He explained that delays in loading and unloading export-import cargo have already caused logistics bottlenecks.

Meanwhile, Shanghai authorities held an executive meeting the day before and decided to expedite and expand policy support for self-employed individuals and small and medium-sized enterprises, including tax refunds, fee reductions, rent cuts, and financial subsidies. They also introduced policies to partially support food prices to stabilize prices.

This content was produced with the assistance of AI translation services.