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.

Reference:
https://economictimes.indiatimes.com/small-biz/trade/exports/insights/world-economy-faces-supply-hit-as-china-battles-covid-again/articleshow/90250149.cms
https://www.thehindu.com/news/international/chinas-lockdowns-spur-concern-over-supply-chain-freight-impact/article65227469.ece

More News
What do China’s data export regulations mean for its trade competitiveness?
News · 13/12/2022

In the second half of 2022, China unveiled the details of its data export regulations, providing further explanations to its existing laws and regulations on data.

READ MORE
Energy Crisis: The EU Chemical Industry Is Reaching Breaking Point
News · 11/11/2022

The current energy crisis has reached an unsustainable level for the European chemical industry. For the first time ever, the EU imports more chemicals than it exports, both in volume and value, resulting in a trade deficit of € 5.6 bn for the first half of 2022.

READ MORE
European Union proposes to add two new hazard classes to EU CLP regulation for endocrine disruptors (EDCs)
News · 17/10/2022

Endocrine Disrupting Chemicals (also referred to as hormone disruptors or EDCs) are synthetic chemicals that are not produced by the human body and that disrupt the normal functioning of humans and animals.

READ MORE
The Shipping Industry in a downward spiral
News · 03/10/2022

The shipping industry is now returning to normality and is in a downward spiral. The cost of shipping goods from China has slumped to the lowest level in more than two years as the world economy stumbles, dimming prospects for container carriers that turned in record profits during the pandemic.

READ MORE
Global Freight Situation
News · 08/09/2022

No precipitous plunge in container shipping rates, just ‘orderly’ decline.

READ MORE
3 Key Insights into the Global Food and Beverage Market
News · 02/08/2022

The global food and beverage market size is expected to grow from $5.8 trillion in 2021 to $6.4 trillion in 2022 at a growth rate of 9.7%. The food and beverage market size is expected to grow to $8.9 trillion in 2026 at a compound annual growth rate of 8.7%.

READ MORE
NEW DRUGS (AMENDMENT) RULES,2022 MANDATES QR CODES FOR ACTIVE PHARMACEUTICAL INGREDIENTS
News · 01/07/2022

The amendment makes QR codes mandatory on every active pharmaceutical ingredient. The Amendment Rules will come into force from January 01, 2023.

READ MORE
European Green Deal
News · 01/07/2022

On June 22, 2022, the Commission adopted pioneering proposals to restore damaged ecosystems and bring nature back across Europe, from agricultural land and seas, to forests and urban environments. The Commission also proposes to reduce the use and risk of chemical pesticides by 50% by 2030.

READ MORE
Neoadjuvant Dostarlimab is a promising treatment option in locally advanced dMMR rectal cancer
News · 01/07/2022

According to New York Times, in a small clinical trial, 18 patients took a drug called Dostarlimab for around six months, and in the end, every one of them saw their tumours disappear.

READ MORE