(Bloomberg) — Shanghai’s strict Covid-19 curbs are disrupting health care services halfway across the world, with hospitals in New York suffering a shortage of chemicals used in imaging tests — the latest example of how the Chinese city’s five-week-long lockdown is snarling global supply chains.
Health care facilities have seen shortages of an iodinated contrast medium known as Omnipaque that’s produced at a GE Healthcare factory in Shanghai, the Greater New York Hospital Association said in a May 4 statement. The chemical agent is widely used in X-rays, radiography and CT scans.
The hospital body also warned that supplies may be curtailed by as much as 80% for the next two months even though the factory has resumed production. It recommended health care providers ration existing stock for essential use only while seeking out other suppliers and considering alternative scanning tests for patients.
A representative for GE Healthcare, the $17.7 billion unit of General Electric Co., said in an emailed response that the firm was “working around the clock to expand capacity” of the imaging chemical. “After having to close our Shanghai manufacturing facility for several weeks due to local Covid policies, we have been able to reopen and are utilizing our other global plants wherever we can,” GE Healthcare said in the email. “We are working to return to full capacity as soon as local authorities allow.”
China’s dogged pursuit of its Covid-zero strategy, exemplified in the stringent lockdown of its financial and trade hub since early April, has hobbled global supply chains and hurt companies from Tesla Inc. to Apple Inc. Critical components for everything from PCs to smartphones and automobiles are either being produced in insufficient quantities or are stuck in a logjam at the Shanghai port, the world’s biggest container terminal.
A slew of carmakers ranging from Volkswagen AG to Toyota Motor Corp. and Chinese EV maker Nio Inc. have only just started to resume production at factories in Shanghai and the industrial province Jilin, which has recently reopened after a lockdown. The Shanghai city government said last week that more than 70% of the 1,800 industrial companies it monitors had resumed production as of May 4. But the supply chain may take some time to ease up.
As Shanghai emerges from its worst Covid outbreak as cases decline from a peak of over 27,000 new infections daily to fewer than 4,000 this week, officials continue to find cases outside of isolation facilities and sealed residential compounds in the city of 25 million people. The persistence of such community spread means authorities are unlikely to meaningfully ease movement restrictions for fear of reigniting the outbreak.
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