by Freedonia Industry Studies
March 21, 2022
This past week, COVID-19 outbreaks in Chinese industrial regions, Hong Kong, and elsewhere (including positive cases with the First Gentleman and former President Obama) pushed the pandemic back into the news, if not back onto the front pages where it had been for so long.
“Nonessential” business in several Chinese cities and movement between major industrial and financial areas such as Shenzhen, Shanghai, Tianjin, Qindoa, and Hong Kong have been restricted. Warehouses closed, and freight drivers face additional testing. Truck drivers must change at designated checkpoints around Hong Kong. These and other measures combine to challenge a global supply chain that was already seeing stresses from fighting in Ukraine and the corresponding sanctions on Russia.
However, China is seeking to institute more targeted coronavirus response actions to keep the economy from grinding to a halt when infections surface. The result has been that – following a week-long suspension of “nonessential” businesses – many are allowed to resume business if they meet specific criteria, including heightened testing and on-site dorms for workers. Still, those measures require resources and more rural and less economically developed areas are still subject to 2020-style lockdowns.
As responses change and outbreaks continue to come up (with the ongoing risk of new variants), there will continue to be hiccups in output and distribution. Companies will continue to watch for changes, particularly around key export producers, distribution hubs, and sea ports as well as shifting levels of openness in response to outbreaks.
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