Lockdown in Dongguan (Guangdong) raises fears for the local (and global) economy

Mass testing is underway in the large industrial centre to stop a new coronavirus outbreak. The province's ports are still congested, also affected by frequent blackouts. Guangdong produces 10 per cent of China’s GDP; any slowdown is dangerous for the country, already struggling with high levels of youth unemployment.


Guangzhou (AsiaNews) – Guangdong authorities have extended the lockdown in some neighbourhoods in Dongguan.

After the discovery of two coronavirus cases over the weekend, the large industrial centre launched a mass campaign to test the population; entire communities are in isolation and residents cannot leave the city with huge damage to the local economy.

The southern Chinese province has been grappling with a coronavirus resurgence since late May. The Delta variant, which first appeared in India, is of particular concern.

Yesterday, the health authorities reported only seven new cases; the average for the last week was 11 per day.

Since 28 May, 168 cases were reported in Guangdong, 90 per cent in the provincial capital Guangzhou.

Strict quarantine and disinfection measures have caused congestion at the Yantian International Container Terminal, one of China's busiest ports, serving Shenzhen's technology hub. At least 50 merchant ships are anchored off the coast waiting to dock.

According to Reuters, more than 160 cargo ships have affected by the lockdown. As a result, many Chinese exporters have preferred to move their goods to Europe by land.  

Operations in Yantian could return to normal by the end of June.

Shekou and Nansha, the province's other major ports, have also faced congestion problems.

The new coronavirus outbreak has created further dangers for the local economy. What is more, the province has been recently hit by frequent blackouts that threaten industrial production.

Power outages are due to poor rainfall, with hydroelectric power plants forced to operate below capacity, soaring price of coal (which 60 per cent of China’s electricity output), and the industrial sprawl.

Guangdong produces 10 per cent of China’s GDP; and any economic slowdown would be a danger for the whole of China.

The recovery from the COVID-19 crisis has been driven by manufacturing and exports. However, the country is facing unbalanced growth, with service industries struggling to return to pre-emergency levels.

The lack of opportunities in the tertiary sector have kept the level of youth unemployment high, 13.8 per cent, according to China’s National Bureau of Statistics, more than double the urban jobless rate, which fell to 5 per cent in May.