China’s lockdowns disrupt global supply chains

Strict Covid-19 measures introduced by China to curb the outbreak of Covid-19 have led to further disruption of the global supply of finished goods, including consumer electronics and car parts.

A growing number of Chinese cities are requiring truck drivers to take daily Covid-19 PCR tests before allowing them to cross municipal borders, or they are quarantining drivers deemed to be at risk of infection.

The measures have limited how quickly drivers can move components among factories and goods from plants to ports. Shanghai and other major Chinese cities have imposed lengthy and stringent lockdowns to try and curb the further spread of the coronavirus.

Previous interruptions in the supply of goods from Chinese factories to buyers around the world mainly involved the temporary closure of shipping ports, including in Shenzhen in southeastern China in May and June last year, and then near Shanghai last summer.

International relations executive director Penda Naanda told New Era that with the number of coronavirus cases rising in China, there could be more trouble ahead if there are further lockdowns for both big and small businesses. “This will ultimately have a negative impact on the trade patterns between China and the rest of the world – Namibia included. The supply chain disruptions will have an impact on the Namibian economy, as Chinese goods will not arrive in Namibia on time. There will also be likelihood of ripple effects because of the Interconnectedness between Shanghai and other regions of China, especially the manufacturing,” Naanda observed.

In 2021, the Namibian Statistics Agency (NSA) indicated that trade relations between Namibia and China continue to grow on a quarterly basis, with the latest trade statistics showing the Asian giant remains Namibia’s top export market. The current trade statistics also show that Namibia’s total merchandise trade declined to the level of N$15 billion, which is 13.5% less than its level of N$17 billion in December 2020. Being one of the major focuses of the financial industry, Shanghai, which is hardly hit by the Covid-19, is a manufacturing and trade hub.

Shanghai is also the world’s busiest shipping port, which means the shipping of goods from China to the rest of the world will be experiencing delays and, in the process, causing obvious trade disruptions.

Naanda believes the Covid-19 shocks in China will not be of long-term nature.

– anakale@nepc.com.na