China shuts down world’s largest electronic market in Shenzhen after Covid spike

China’s technology hub Shenzhen on Monday ordered the closure of the world’s largest electronics wholesale market to contain a recent spike in coronavirus cases in the southern city, amidst a call by a leading Chinese think tank for a change in the country's 'zero-Covid' policy that it said was causing widespread disruption of business.

Merchants in the Huaqiangbei district, home to the world’s largest electronics market, received an official notice that the market will be closed till Thursday to contain the Covid spread.

All tenants are required to work from home during the period and take a nucleic acid test every day, Hong Kong-based South China Morning Post quoted one of the district’s biggest operators, Huaqiang Electronics World.

Key manufacturing enterprises, including telecommunications equipment giant Huawei Technologies Co, China’s top chip maker Semiconductor Manufacturing International Corp and Apple supplier Foxconn Technology Group, were ordered to follow a “closed-loop” system for a week that restricted movement of employees, while keeping their production schedules on track.

Read | Chinese think tank: Virus curbs must change to help economy

The new virus cluster has emerged as Hong Kong, which is close to Shenzhen, has reported a big spike in cases. Hong Kong on Monday recorded 8,488 new cases, the second such big spread of the Covid-19 in recent months.

The cases could peak at 20,000 next month, a government pandemic adviser warned on Monday, the report said.

The former British colony has witnessed the worst outbreak a few months ago causing extensive deaths.

Hong Kong so far recorded 1,522,460 cases and 9,668 fatalities.

Recently thousands of tourists were stranded for days when China shut down the biggest summer resort Sanya in Hainan cancelling flights and transport services to contain the spread of the Omicron variant, which Beijing continues to find difficult to contain.

Shenzhen China’s most modern industrial city itself faced several shutdowns in the recent past to deal with sudden spikes of the virus.

On Sunday China reported 301 locally transmitted confirmed Covid-19 cases in the country, of which 161 were in Sichuan Province, the National Health Commission reported on Monday.

Read | ‘The eye of the storm’: Taiwan is caught in the great game over microchips

Altogether 1,255 local asymptomatic carriers were newly identified on Sunday, including 570 in Tibet and 98 in Hainan, said the commission in its report.

So far 5,226 people so far have died of the virus in China.

The periodic Covid-19 lockdowns, including the shutting of China’s biggest city Shanghai a few months ago, have seriously affected supply chains of the industrialised goods in the world’s second largest economy.

In Beijing, all the residents currently undergo mandatory testing three days a week to ensure proper checks on the periodic spikes.

The zero Covid-19 policy was expected to continue until the once-in-five-year congress of the ruling Communist Party of China (CPC) is held.

The meeting during which Chinese President Xi Jinping was widely expected to get nominated for an unprecedented third term was expected to be held in the next few months.

Unlike his predecessors who retired after two-five-year-terms, Xi, 69, was expected to continue in power for another term and perhaps for life.

The closure of the electronic hub was declared as a Chinese think-tank has called for change of the country’s zero Covid-19 policy saying it is causing widespread disruption of trade and business.

In a rare public criticism of the 'zero-Covid' policy pursued by Xi, a Chinese think tank on Sunday said the virus curbs resulting in periodic shutdowns of cities disrupting trade, travel and industry must change to prevent an economic slowdown.

The Anbound Research Centre said the government needs to focus on shoring up shrinking growth noting that the US, Europe and Japan are recovering economically after easing anti-disease curbs.

Preventing the risk of economic stall should be the priority task," the think tank said in a report titled, It's Time for China to Adjust Its Virus Control and Prevention Policies.

It is rare for a think tank to publicly disagree with the policy of the CPC and its top leader.

On Monday Shenzhen, the city of 17 million people, ordered closure of all shops except for essential businesses, such as supermarkets, restaurants and pharmacies.

Restaurants are only allowed to provide takeaways. All dine-in services have been suspended.

Shenzhen, which managed to contain the Covid-19 outbreak in March after a week-long lockdown, has been hailed as a model of effective governance as Beijing tries to balance its zero-Covid-19 policy with sustaining economic activities.

The latest measures, however, show the challenge that China faces in trying to walk a fine line between two largely conflicting goals, the report said.

Premier Li Keqiang visited Shenzhen earlier this month and urged the city to take a lead in “injecting new dynamism” into stabilising development and growth.