The largest electronics wholesale market in the world is under lockdown in Shenzhen

The Huaqiangbei district of Shenzhen, the tech hub of China’s south, is on a shutdown. The closure of its huge wholesale electronics market is already causing new disruptions to the local and global supply chains.

The shutdown, which is supposed to last at least until Thursday, was announced early on Monday. All of the market merchants are expected to work from home and take a Covid test every day. This is only one of the broader range of measures implemented by the regional authorities on Monday, with five other districts under lockdown. All but essential businesses – food shops, pharmacies and restaurants, only providing takeout services - in the area are closed.
In addition, 24 subway stations in the 17-milllion city of Shenzhen are shut down for an indefinite period of time. The city has already contained a coronavirus outbreak this spring with a 7-day lockdown, and was acclaimed as a very effective governance model, which balances sustained economic activity and the zero-Covid policy adopted by Beijing.

The new infection wave that is spreading across China is leading to new lockdowns and quarantines all over the country. This “new normal” routine is rooted in China’s zero-Covid policy, which contradicts the “living with Covid” approach taken by other Asian countries.

Covid-19 cases have been on the rise in the last two weeks, and mass testing and targeted lockdowns were to be expected.

The high-tech sector of Huaqiangbei, which comprised 20% of Shenzhen’s GDP in 2000, significantly increases the risks for supply chains. The last lockdown was in June, and in July the authorities put major production areas in “bubble production” mode, wherein major companies had to follow “closed-loop” production procedures: employee movement was restricted, but production remained on track.

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