SHANGHAI: Shanghai faces weeks, if not months, of slow recovery until economic activity can fully bounce back from the crippling Covid lockdown that began in March.

       Based on the experiences of other Chinese cities like Wuhan in 2020 and Jilin earlier this year, it will take time for shops to reopen or factories to secure supplies and ramp up production. Labour shortages could emerge and the knock to business and consumer confidence will likely linger.

       Even though the majority of Shanghai’s 25 million people are able to move freely in the city from yesterday and some shops are resuming, many factories and businesses are still closed or operating below capacity.

       The world’s largest port in the city remains backed up and truck traffic is at about a quarter of pre-pandemic levels.

       In Wuhan, it took until 2021 for the economy to recover from the damage sustained from the initial Covid-19 outbreak in 2020 and the more than two month lockdown that followed.

       And the economy of Xi’an took months to rebound from the lockdown that ended in late January this year: retail sales in the city through the end of March were down 15% on last year and in the whole province of Shaanxi it fell 2.4% this year through April, according to official data.

       “We’re talking about long supply chains that have been disrupted for more than eight weeks so it will take some time to stabilise,” said Eric Zheng president of the American Chamber of Commerce in Shanghai.

       The shutdown has been a “huge test” for global supply chains, he said, and while the government has been working on reducing transport bottlenecks, there are still restrictions on drivers crossing into Shanghai or leaving the city to go to other provinces.

       While the Covid-19 outbreak in Shanghai wasn’t as severe as the one in Wuhan in 2020, Shanghai’s economy is bigger and it’s more connected to global supply chains than Wuhan.

       Shanghai and its surrounding provinces are one of China’s industrial heartlands, with car and electronics manufacturers located there to access the port. The effects on supply chains of the two-month shutdown have rippled across the country and around the world, impacting supplies of critical components.

       “One of the biggest challenges is around inland logistics, in particular trucking to get goods from the factory to the port,” Heath Zarin, chief executive officer of logistics investment company EmergeVest, said in an interview with Bloomberg TV on Monday. — Bloomberg