Covid Surge in China Sparks Fears of a Beijing Lockdown

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Concerns that Beijing could be headed for a Shanghai-style lockdown that could further damage China’s economy were growing Monday after the Chinese capital reported a spike in Covid-19 cases.

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Authorities in Beijing ordered 3.5 million residents in the biggest district of Chaoyang to undergo three rounds of mass testing this week and shut down some residential areas in a bid to contain the spread of the virus. The move sparked panic buying at supermarkets as residents hastened to stockpile essentials.

China already is trying to contain a spike in Covid infections in the economic hub of Shanghai, where more than 25 million residents have been locked down for weeks.

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The rising cases threatens to exacerbate disruption to global supply chains. Apple (ticker: AAPL) supplier Hon Hai Precision Industry,
also known as Foxconn Technology Group, paused operations at two of its factories in China’s Kunshan, a city close to Shanghai, after new Covid-19 cases were reported on site, the South China Morning Post reported.

In a statement, reported by Reuters, Foxconn said the suspension of operations would have a limited effect as production had been shifted elsewhere.

The deteriorating outlook dragged down the commodities. Iron ore futures in Singapore dropped as much as 11% in response to the negative sentiment and were recently 6.2% lower at $141.40 a ton. The onshore yuan fell to its weakest in a year, while oil dropped about 3% to trade below $100 a barrel.

“Lockdowns in China — and fears that these will spread and persist — is hitting sentiment in commodity markets. US oil futures slid $4 to $98, whilst Brent slid a similar amount to $102,” said Neil Wilson, chief market analyst at markets.com.

Write to Lina Saigol at [email protected]

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Credit: www.marketwatch.com /

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