A lively “Black Market in China is back amidst Covid-19 lockdowns and rumors of an extension to Beijing
Rumors of a potential blockade in Beijing have led to the rush to grab a huge number of goods (many items, such as fruit, coffee and even disposable diapers are now considered "frivolous" under the terms of the Shanghai blockade). Meanwhile, the situation in Shanghai, which has entered its fourth week (and even longer in the eastern part of the city), has spurred a level of need that not only leaves citizens desperate, but also reminds many of bad times. where planning was the center of China's status quo, creating an environment that allowed black markets to thrive.
Indeed, as the New York Times reports , the black market is flourishing once again in the block age, but this time, companies are the main participants as they scramble to find ways to meet their customers' needs while complying with the measures. incredibly stiff. As a result, the costs of purchasing some essential items, including day passes to travel the mostly deserted streets of Shanghai, cost businesses the equivalent of $ 2,000 per day, costs that are passed on to consumers.
Due to Covid restrictions, commercial trucks have a hard time delivering food and household items to Shanghai. Within the city, only vehicles with season tickets are allowed on the street.
A logistics company owner who spoke to NYT said the situation in China is so bad it is unprecedented.
“I've been in the logistics industry for 28 years,” 47-year-old Mr. Yang said in an interview. “But I've never seen a mess like this. There were numerous emergencies to deal with ”. He estimates he lost tens of thousands of dollars in March.
For those wondering why the Chinese leadership chose to inflict such problems on their own population after confirming a minimal number of cases and deaths, the NYT reminds us of President Xi's latest stance on lockdowns was not just to continue them, but even to extend them. "Perseverance is victory," he said on April 13. State media, provincial party secretaries and lower-level government officials all know who's in charge and are eager to show their loyalty. Many local officials are stepping up pandemic control measures so as not to risk an outbreak that could endanger their positions.
Adding what appears to be another useful piece of context, the NYT confirms that Shanghai companies are unable to function right now unless they can create a "closed loop" system, literally letting workers live on their own. Work.
Some Shanghai factories, such as Tesla and some of its suppliers, have resumed production. But they must follow a series of complicated and costly pandemic control measures, including the creation of what is called a closed-loop management system where workers live on site and regularly test for the virus.
Not many companies are willing or able to do this. A senior executive at a major logistics company told me they only have a few thousand delivery workers back at work in Shanghai because they lack the capacity to provide housing for so many workers. That's significantly less than the more than 60,000 delivery people the company has had during the peak season in recent years. All in the total indifference of the government, which does not even provide economic aid.
The CEO of a high-end consumer brand also wonders how long his stock can do this. The company raised $ 100 million last year and had ambitious expansion plans, he said in an interview. But nearly a third of the 150 retail stores operated had to close their doors in blocked cities. Their online sales, which weren't damaged in 2020, are suffering now as many cities close their highway exits, blocking e-commerce deliveries.
Finally, as the Shanghai lockdown drags on, people are increasingly concerned not only with the spread of lockdowns, but also with the spread of the economic stressors they are creating. John Ji, a real estate developer in Nanjing, Jiangsu Province, is anxiously watching what is happening and wondering what the consequences will be for him as well as for the economy in general. Who wants to buy a house in China now?
Thanks to our Telegram channel you can stay updated on the publication of new articles of Economic Scenarios.
The article A lively "Black Market in China in the midst of Lockdowns for Covid-19 and rumors of extension in Beijing is back" comes from ScenariEconomici.it .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/torna-un-vivace-mercato-nero-in-cina-nel-mezzo-dei-lockdown-per-il-covid-19-e-delle-voci-di-estensione-a-pechino/ on Tue, 26 Apr 2022 10:00:18 +0000.