Delta variant threatens China's upswing

The spread of the highly contagious Delta variant of the corona virus threatens China's upswing. In Nanjing, the capital of the export-strong Jiangsu Province, this variant was first detected in the People's Republic at the end of July. Since then, it has spread across the country: by Sunday, 353 cases had been officially confirmed by the authorities. Many cities warn against travel that is not absolutely necessary. Political decision-makers are under pressure because they want to protect the population while avoiding undue burdens on the economy. "The Delta variant is the biggest test of China's zero-Covid strategy since the first outbreak last year," said economist Julian Evans-Pritchard of Capital Economics. "But given the country's successes to date in dealing with the virus, we expect it will get the outbreak under control before it gets out of control. Of course, this will come with some economic cost." The Commerzbank analysts expect domestic consumption and service providers to suffer from the measures against the spread of the delta variant. The International Monetary Fund (IMF) has just lowered its growth forecast for China's gross domestic product (GDP), from 8.4 to 8.1 percent. The corona-related temporary closure of the Yantian commercial port has shown how quickly turbulence in the world's second largest economy can affect the global exchange of goods. This had more serious consequences for global supply chains and the flow of goods than the shipwreck in the Suez Canal, according to a survey by the Federal Association of Materials Management, Purchasing and Logistics (BME) among 166 companies. The delays in container loading posed a problem, especially for the technology and electronics industry. The port - which connects the industrial metropolis of Shenzhen with other countries - started its loading activities completely at the beginning of July. "However, the companies we surveyed expect that the full commissioning of the port will lead to long-term impairments," said Riccardo Kurto, China representative of the BME. "The expected disruptions lasting several weeks are likely to last until the logistics function largely smoothly again." According to the federal association, around 90 percent of all electronics exports from the People's Republic would normally go through the port of Yantian. Yangzhou, which is near Nanjing, has been struggling with rising corona cases since Wednesday. Many factories and logistics companies in the city of five million were closed because employees joined the queues of people who wanted to be tested - some up to three times a week. "We cannot deliver goods because the delivery company told us it has stopped providing services," said the manager of a toy factory with the surname Wang. "In the past few days, many places have been gradually cordoned off. Today we were officially ordered to cease operations. No employee came into the factory."