COVID-19 Outbreak Affects Chinese Manufacturing Province of Zhejiang

By Jonathan Walker | December 18, 2021
Jonathan loves talking politics, economics and philosophy. He carries unique perspectives on everything making him a rather odd mix of liberal-conservative with a streak of independent Austrian thought.
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Manufacturing businesses in Zhejiang are under stress following the outbreak of COVID-19
Manufacturing businesses in Zhejiang are under stress following the outbreak of COVID-19. (Image: PIRO4D via Pixabay)

On Dec. 6, the Chinese province of Zhejiang reported its first recent case of COVID-19. Since that first incident, the province has reported 217 locally transmitted cases. Zhejiang is one of China’s largest and busiest manufacturing hubs. 

The outbreak of cases has resulted in tight restrictions being imposed in the region. As a consequence, the production of many goods in Zhejiang has come to a halt.

Reuters reported that 20 companies in the province have shut down operations, including firms involved in the textile and battery industries. The companies claim that they have ceased operations after government orders instructed them to do so.

One staffer from garment materials maker Ningbo Mengheng Costume Accessories Ltd. told Reuters that all its factories in the Zhenhai district have been shut down. 

“[The firm] could not sign new contracts as [it is] worried that they not be delivered on time,” the staffer said. More than 700 foreign firms, including Toshiba and LG, have invested in several companies operating in the district.

According to a national health official, the outbreak is developing at a “relatively rapid” pace in the cities of Hangzhou, Shaoxing, and Ningbo which together accounted for over 50 percent of the province’s economic output in 2020. Zhejiang contributes to 6 percent of China’s total GDP.

One of the most affected industries in the province is said to be the textile industry. Textile firms are facing difficulties accessing the Ningbo-Zhoushan port since many truck drivers are opposed to the quarantine requirements in place. In an interview with The Loadstar, David Fan, sales manager at the Twings Supply Chain, said that the situation in Zhejiang is being kept under control.

“At the moment, the port of Ningbo hasn’t received any obvious impact… However, it is inevitable that the epidemic situation in the city will have a certain impact on the truck transport of import and export containers, because many areas require truck drivers to provide a nucleic acid negative test certificate. It takes time to do the test and get the certification, so it will cause a slight delay in inland trucking,” Fan said.

Over 50,000 people in the Zhejiang province have been put under quarantine. The health conditions of over half a million people have been monitored. Zhejiang is home to 64.6 million people. Flights from the Ningbo Lishe International Airport to Shenzhen and Beijing have been canceled. In Hangzhou, the capital city of Zhejiang that is under partial lockdown, hundreds of domestic flights have been canceled.

In the cities of Yiwu and Wenzhou, entertainment venues like the card and chess parlors and bars have been shut down. Zhejiang authorities have also instructed travel agencies to suspend any trips that involve traveling between the province and other regions. Local sports events have been canceled.