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**MARCH 14, 2022**

Kuttner on TAP

COVID and the China Bottleneck

****

Beijing's extreme lockdowns are one more reason to unwind U.S.
reliance on Chinese supplies.

China COVID strategy is based on something close to zero tolerance. When
cases increase, Beijing locks down entire provinces.

The latest is a lockdown of Shenzhen. This order affects at least 17.5
million people in the city and a total of 24 million in the surrounding
Guangdong province, who are forbidden from traveling. The order, which
took effect Sunday, effectively shuts down the regional economy.

Guangdong province accounted for 11 percent of China's GDP and 23
percent of China's exports in 2021, according to Bloomberg
,
whose economists estimate that Beijing's measures directly affect
about half of China's economy.

The problem is that the omicron variant and its subvariants are not
cooperating with China's lockdown strategy. Nationally, cases in China
doubled nationwide to nearly 3,400 in one day. Some version of COVID
will likely be endemic for a long time. Other nations have dealt with
similar upsurges without total lockdowns.

As a totalitarian government, China resorts to abrupt and extreme
measures like these. As public-health measures, they may work for China
(though they will cost China's 2022 growth targets dearly). But they
clearly do not work for a China that plays the role of key supplier in
the global supply chain.

The U.S., faced with a supply chain crisis
, was already moving away from
reliance on Chinese sources of supply. Now, with China's role in
helping Russia evade the impact of Western economic sanctions and its
extreme COVID measures further reducing production and supply, the Biden
administration can and should accelerate its delinking from the Chinese
economy.

Unfortunately, this will take time, and in the short run Beijing's
lockdown strategy will only add to global shortages and supply-driven
inflation. It's one more painful lesson of the disastrous fallout from
extreme globalization.

****

~ ROBERT KUTTNER

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**Robert Kuttner's latest book is**

The Stakes: 2020 and the Survival of American Democracy
.

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