China Shuts World’s Biggest Electronics Market Due to Covid

 

Authorities in Shenzhen, China’s southern technology hub, shut down the world’s largest electronics market of Huaqiangbei on Monday in a clampdown on a Covid-19 outbreak.

Three buildings that house thousands of shops selling key components like microchips and telephone parts to manufacturers will be shuttered until September 2, local community officials said.

Building managers told workers at the shops to work from home, three people working in the area said.

The city’s same officials also suspended service at 24 subway stations in the central districts of Futian and Luohu in a bid to curb Covid transmission.

Home to 18 million people, Shenzhen reported just nine symptomatic and two asymptomatic cases on Monday from testing the previous day.

 

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China Factory Activity Hit

Meanwhile, China’s factory activity is likely to have contracted again in August, a Reuters poll showed on Monday, as Covid flare-ups and a distressed property sector pummelled demand while a power crunch in southwestern China hit production.

The official manufacturing Purchasing Manager’s Index (PMI) is expected to have risen to 49.2 in August from 49.0 in July, according to the median forecast of 23 economists polled by Reuters. Reversing previous gains in June, the gauge is expected to stay below the 50-point mark that separates contraction from growth.

China’s economy narrowly escaped contraction last quarter due to widespread Covid lockdowns, and economists say its nascent recovery is in danger of fizzing out amid fresh virus flare-ups and the deeply troubled property sector.

“High-frequency indicators such as container throughput and steel demand data weakened further in August from July,” analysts at Goldman Sachs said in a note on Friday, forecasting the reading to edge down to 48.8.

Tighter Covid restrictions in August as well as the hot weather might have also affected outdoor construction activity due to the extreme heat and dragged down the services PMI, they added.

Searing heatwaves have swept across China’s vast Yangtze River basin since mid-July, hammering densely populated cities from Shanghai to Chengdu and causing the southwestern province of Sichuan to suspend industrial production to ensure residential power supply.

 

  • Reuters with additional editing by Vishakha Saxena

 

 

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Vishakha Saxena

Vishakha Saxena is the Multimedia and Social Media Editor at Asia Financial. She has been working as a digital journalist since 2013, and is an experienced writer and multimedia producer. As an eager stock market trader and investor, she is keenly interested in economy, emerging markets and the intersections of finance and society. You can tweet to her @saxenavishakha