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China’s COVID Policy Threatens U.S. Economy

China’s zero-COVID policies—and the protests that have erupted as a result—have the potential to cause wider economic challenges for the United States, according to ABC News.

What’s happening: In recent months, China has continued its aggressive policies to curb the spread of COVID-19. Those policies have included measures like citywide lockdowns that, according to some residents, are choking off access to food and medical care. Meanwhile, protests against the lockdowns have cropped up in cities across China, adding to China’s domestic economic challenges

The economic connection: The unrest is coming at a time when the United States is facing its own economic headwinds, including interest rate hikes designed to reduce inflation as well as disruptions resulting from Russia’s war in Ukraine.

Under the hood: “COVID lockdowns in China have clogged supply chains in the manufacturing stalwart . . . analysts told ABC News. Meanwhile, the zero-COVID policy has stagnated the Chinese economy, hurting spending among Chinese customers and in turn pummeling U.S companies that depend on it, they said.”

  • While many of the factors that contributed to supply chain bottlenecks during the height of the pandemic have eased, China’s zero-COVID policies and related lockdowns have meant that some supply chains are sporadically interrupted. Those interruptions reduce supplies of key goods in the United States, which contributes to inflation.

What comes next?: In response, China has increased surveillance and police efforts to clamp down on protests, with health officials also signaling some loosening of COVID-19 restrictions to address public concerns.

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