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
Disruptions in the Red Sea, Suez Canal, and Panama Canal have driven up shipping costs, sending shockwaves through the global economy.
It was truly heartwarming to see so many clients and associates visiting our stand, even as late as at the end of the show, sharing drinks and engaging in conversations.
Ocean freight rates on key global container routes have fallen again. Despite the upcoming Golden Week in China, which usually drives demand, the situation this year is slightly different, and the expected rate increase may not happen.
Highly potent active pharmaceutical ingredients (HPAPIs) are at the dangers of cross-contamination with other product forefront of pharmaceutical manufacturing. They are particularly common in targeted therapies and personalized medicines. This is primarily due to their potent therapeutic effects at low dosage forms.
The floating traffic jams off ports. The multiplying costs of moving freight. The resulting shortages of goods. All of this had seemed like an unpleasant memory confined to the COVID-19 pandemic. But no such luck!
An ocean container capacity crunch has hit global trade just as peak shipping season starts, with freight spot rates up some 30% over the past few weeks and heading higher.
The first joint Europe-wide assessment of the drivers and impact of chemical pollution by the European Environment Agency (EEA) and the European Chemicals Agency (ECHA) has concluded that, despite progress in some areas, “more work is still needed to reduce the impact of harmful substances on human health and the environment”. Key findings include:
The severe drought which has forced the Panama Canal, one of the world’s busiest trade passages, to limit daily crossings could impact global supply chains during a period of high demand.
In the early hours of March 26, the Singapore-flagged ship Dali, loaded with 5,000 containers, slammed into Baltimore’s Francis Scott Key Bridge, causing the 1.6-mile (2.5-kilometer) bridge to collapse in a matter of seconds. The Dali was departing for Colombo when the disaster struck. Initial fears were confirmed that half a dozen people lost their lives in the accident.