China’s strict pandemic policies are causing its industrial production to slow and its economy to take a beating as millions of its citizens are forced under lockdown orders.
New cases of COVID-19 began spiking to their highest levels in parts of mainland China last month, resulting in the government closing off entire metropolises like Shenzhen, which has been called the Silicon Valley of China.
Additionally, fearing that the lockdowns will continue, investors from other countries have begun pulling their money out of the Chinese economy. In March, some $7 billion worth of shares were yanked from China’s markets by overseas investors, and April has seen outflows of about $1 billion so far, according to Bloomberg.
Last month, several factories were affected by the shutdowns, including Foxconn, a major assembler of iPhones. The lockdowns in China could further worsen U.S. inflation by adding to supply constraints.