The Supply Chain Probably Isn’t Clearing Up Anytime Soon

China has ordered roughly 51 million people into Covid lockdown for at least a week, impacting its entire northeastern province of Jilin and the southern tech and manufacturing hubs of Shenzhen and Dongguan. It's the largest full-scale lockdown in the country since Wuhan and its neighbors did so in early 2020.

🤔 Why it’s a big deal: Since the pandemic began, the world’s second-biggest economy has followed a “zero-Covid” policy, repeatedly locking down entire cities (or sections of them) and ordering factories to suspend operations.

The closed factories cause production snags in various industries, which then impact consumers (aka us).

• When authorities halted operations at a port in Shenzhen last June because of Covid, it caused a shipping backlog that took months to ease. One exec at shipping giant Maersk told Fortune that the closure was “a much bigger disruption than the Ever Given getting stuck in the Suez Canal.”

🚫🏭 Some of the companies who’ve halted operations in the last week:

• Apple
• Foxconn, a major assembler of iPhones
• Volkswagen
• Toyota
• More than 40 Taiwan-based makers of semiconductors and other electronic components

👀 Looking ahead… Shenzhen, where many of the companies above have operations, is potentially at greater risk of a massive Covid outbreak than other Chinese cities, the WSJ reports. The southern tech and shipping hub shares a border with Hong Kong, which is currently suffering its worst Covid outbreak since the pandemic began.

Overall, China is seeing new cases on levels it hasn’t encountered since early 2020.