Supply Chain Stress Increases as COVID 19 Infection Rises Again in China
A few weeks after the Zero Covid Policy of China was lifted, Covid 19 is again running rampant in China. The infection rate has risen dramatically, and the supply chain is again at risk of bottlenecks. There are about 5.43 million positive cases in Shanghai, and it is estimated that around 12.5 million will be infected by the end of the year.
The infections surged dramatically soon after the abrupt lifting of the control measures of the Zero Covid Policy.
90% of the staff at major Chinese ports have contracted Covid 19 as of 21st December. Truck drivers are falling ill and factories and logistics companies have opted for an early and longer new years holiday.
By the end of December, 60% of enterprises in Guangdong, Zhejiang, and Shandong will cease working. Some factories are also slowing production due to the lack of components or raw materials from their suppliers.
Hence congestion is on the rise once again, and the country’s supply chain may once again face challenges. However, there is a silver lining, since the import demand for Christmas and New Year has died down, the demand is at a seasonal low, easing the pressure on the supply chain.
A survey by World Economics showed that China’s business confidence fell to an all-time low in the last 10 years. However, the Chinese Government has reported that the situation is predictable and under control. They also said that, they have taken measures to refine their response to the crisis.