Fears for global supply chain as China’s COVID cases double in one day

Fears are growing for the global economy as coronavirus restrictions in China lock down cities and shut down factories.

China has placed more than 50 million into lockdown as it struggles to battle multiple outbreaks of the “stealth” Omicron sub-variant.

It’s raising concerns about the stability of the world’s second-largest economy and triggering a sell-off on commodity and equity markets.

“The country’s virus control strategy is still effective against the omicron variant, but omicron’s stealth and rapid transmission means that faster and stricter measures should be taken,” Lei Zhenglong, deputy head of the commission’s Bureau of Disease Prevention and Control, was quoted as saying in the China Daily.

He said 27 provinces were now affected.

China’s daily COVID-19 cases had doubled in just 24 hours, raising fears about future disruptions to major supply chains.

Flights to Shanghai will be diverted to other cities from next week.

China’s tech hub of Shenzhen has been locked down for a week.

Outlook slashed

Morgan Stanley has slashed its growth forecast for China to zero for the current quarter.

The broker also lowered its 2022 GDP prediction to a 5.1 per cent expansion, from 5.3 per cent, which would be below the country’s formal target of 5.5 per cent.

“The double lockdowns sent a clear message that Beijing is prioritising COVID-19 containment over the economy, and a recalibration of its COVID-19 strategy will likely be delayed,” said Morgan Stanley’s chief China economist, Robin Xing.