Saturday, October 1, 2022

COVID shutdown in Shanghai threatens to cause further export delays

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As a result of a COVID lockdown at Shanghai’s economic hub, Europe and the United States should expect increased delays and shortages of electronics imports from China, according to an economist from the Kiel Institute for the World Economy (IfW-Kiel).

Exports from Shanghai, the world’s largest container port, have dropped by roughly a third, according to Vincent Stamer, a world trade specialist.

“Three weeks after the lockdown started, approximately 30% of goods that should be leaving Shanghai at this moment are not,” he quoted. He also explained that “In other words, that’s 30% fewer exports to the rest of the world.” 

Since the epidemic began more than two years ago, Shanghai has been the epicentre of the greatest COVID-19 wave in China. The port city, which has a population of 26 million people, has been under a rigorous lockdown since March 28, with some workers being forced to sleep in their factories.

Factories in the Shanghai area concentrate in exporting consumer items like tablets and televisions, as well as more advanced and intermediate electronic goods needed in Western production.

Despite Chinese officials’ promises that the limits would have a minor impact on port operations, shipping delays have grown.

The new delays will almost certainly exacerbate a supply chain situation that has worsened since the first COVID lockdowns in spring 2020.

Large portions of the world economy were forced to close as a result of the pandemic, forcing freight businesses to cancel shipping schedules. As a result, a large number of container ships were anchored off the coasts of Western and Chinese ports, often in the wrong place.

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