COVID-19: Strict Shanghai lockdown could have ‘massive global effects’ on supply chains | world news
Shanghai’s lockdown – and China’s zero COVID policy – could have “massive global effects on the supply chain”, experts have told Sky News.
Cameron Johnson, head of Asia-Pacific at FAO Global, a China-focused consultancy, said: “It’s a ripple effect across the supply chain.
“What you will see if this continues is that at some point it will affect business in the UK. Delivery may be delayed by a month or two, or costs may increase.”
Shanghai continues strict lockdown. The city recorded 27,719 additional cases in the past 24 hours, another new record. There were 29,411 new infections across China.
The port of Shanghai continues to operate normally under a “closed loop” system where it is isolated from the city, but there have been difficulties with trucks entering and leaving, causing delays.
“It could be a challenge – you could have wait times, longer lead times, shipping delays,” Mr Johnson said.
This has already caused delays in Europe, according to Josh Brazil, senior vice president of supply chain insight at project44, which tracks global supply chains.
“We are definitely seeing shipping delays in major ports like Hamburg and Rotterdam increasing,” he told Sky News. “We are looking at delays of 10-12 days at major European ports.”
“We’ve already seen prices from China go up. The cost of production is going up, the cost of goods sold in China is already going up, so inflation is already up, and those kinds of delays in manufactured outputs are not going to . to help that.”
European manufacturing companies in the Shanghai region are grappling with lockdowns and supply chain delays, according to Bettina Schoen-Behanzin, vice president of the European Union Chamber of Commerce in Shanghai.
“In the long term, this will really have a huge impact on the global economy and inflation will definitely rise,” she told Sky News.
“We don’t know how long this lockdown will last and that’s the key question.
“It is important that we find a way out because the biggest concern is that, given China’s commitment to its zero COVID policy, the lockdowns could be extended to other manufacturing hubs.
“If the south of the south goes offline – Guangzhou, Shenzhen, if Shanghai continues to stay offline, if another area goes offline – then you’ll start to see massive global supply chain effects. And they won’t be easily resolved. “, said Mr Johnson said.
“It’s not going to be pretty.”