The global economy — already struggling with war in Ukraine and the stagflation risks it’s fanning — is bracing for greater disruption as China scrambles to contain its worst outbreak of Covid-19 since the pandemic began.
If China fails to contain omicron’s spread, further movement restrictions would derail the economy’s promising start to the year, weakening a key pillar of global growth. As manufacturer to the world, any disruptions to exports resulting in shortages could also drive up inflation internationally. A China slowdown would exacerbate the risk of stagflation and global supply chain problems.
Globally, the economic impact of Covid is declining as governments ease restrictions and many move towards a ‘living with Covid’ approach. However, for China, omicron is a key risk for domestic demand, output and, possibly, supply chains.
China’s latest attempt to suppress an outbreak of Covid-19 with lockdowns in several cities has disrupted global supply chains, which is likely to lead to lower growth and profitability across the technology industry.
Several companies in China’s manufacturing centres in both the south and northeast have halted operations amid the most sweeping COVID-19 lockdowns in the country since the start of the pandemic in Wuhan.
If lockdown restrictions spread, affecting access to the ports as well as workers, as happened in 2020 when COVID-19 measures led to record queues for container ships, analysts fear freight may see a disruption, leading to both bottlenecks and rising freight costs as was seen then.
The current surge has certainly posed the biggest test yet to China’s elimination strategy, although the official media has made clear that the “dynamic zero COVID” strategy is here to stay and China is not likely to open up anytime soon.
The strictest COVID -19 lockdown in China since the pandemic began has resulted in container goods sitting at Shanghai’s port for nearly two weeks.
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Oil prices surged past $100 (£74) a barrel to hit their highest level for more than seven years after Russia launched an invasion of Ukraine.
The Russian invasion of Ukraine is already dealing a blow to financial markets and the worldwide economy. Global supply chains and growth had been broadly recovering from the pandemic, but now all that’s in doubt, given the stricter sanctions and other punitive measures against Russia that are in the offing.
Given the evolving on-ground situation and newer variant-led infections, the pandemic is far from over. In such a scenario, for businesses to stay relevant, we will need to be flexible and more adaptable to the changes that need to be embraced to keep core business growth drivers resilient.
As the chemical industry moves into 2022, strong demand for both commodity and specialty chemicals should keep prices robust throughout the year. The industry could face margin pressures amid raw material cost inflation, which will likely remain high through the first half of 2022.
Blackouts and power cuts in the world’s second-largest economy have drawn attention to fuel supply problems that could complicate the country’s pandemic recovery.
The Federation of Indian Export Organizations (FIEO), an apex body of Indian export promotion organizations, has urged the government to provide freight support to all exports including pharmaceuticals till 31st March 2022, as freight rates have skyrocketed and are likely to somber by March 2022.
Science keeps winning! Scientists recently transplanted a pig’s kidney into a human being without immediate rejection by the immune system.