Sunday, May 22, 2022

Gurbaksh Singh Chahal

How the Russia-Ukraine War and China’s Supply Chain Will Make Food the Most Expensive Commodity Ever



How the Russia-Ukraine War and China’s Supply Chain Will Make Food the Most Expensive Commodity Ever
How China’s Lockdown Will Cause Ripple Effects in the World’s Global Supply Chain China’s “zero-Covid” policy, which aims to eliminate Covid spread during an outbreak. However, as it faces its most difficult challenge yet, this policy is struggling to understand its future. Depression and rage are looming among citizens who are unable to access medical care and food as a result of the unplanned lockdowns......... To avoid falling into the Keynesian liquidity trap, China has implemented a supportive fiscal policy by increasing infrastructure spending. ......... China’s pedantic approach to curb COVID has resulted in jammed ports and highways, deserted workers, and numerous closed factories. These disruptions are rippling throughout the global supply chain, affecting everything from iPhones to automobiles. ......... Supply chains operate in a systematic manner, the decision is simple. You can continue to make the main parts, but if your suppliers who make the small parts stop showing up to work, you won’t be able to make the main parts for much longer. So what do you do? ........ a domestic transport that used to cost 7000 yuan ($1,064 USD) now costs 30,000 yuan ($4,561 USD) to deliver. ......... China alone accounts for 30% of global port backlogs, and the current situation indicates that things are about to get even worse. ....... Shanghai’s port is the largest in the world ...... In an increasingly global world, the problems of China are problems of the world. ............ After Russia, China has the worst-performing stock market, with mid-cap and large-cap stocks falling by around 20%. ......... the increased global reliance on China since the beginning of the first pandemic, as evidenced by a 15.4% increase in Chinese exports since 2021. ........ as the leading manufacturer of solar modules, rare earth, ships, PCs, mobile phones, and containers, China has infiltrated virtually every economic aspect of a country, causing the entire world to revolve and be dependent on China. ....... Previously, China was only a final assembly point, but it now manufactures everything from electronics to components such as IC chips and LCD screens. ....... China emerged as a major player in the auto industry, particularly in the EV supply chain, accounting for 74% of global EV battery production. ........... Russia is a major exporter of wheat, aluminum, coal, natural gas, and oil. Ukraine, on the other hand, exports primarily oilseeds and wheat. The outbreak of war means that supply chains, which had been on the mend after nearly two years of lockdown, will be disrupted. Inflation has resulted from this disruption, particularly in food and energy prices. ............

Countries such as Egypt are suffering from severe food shortages as a result of the war.

...... transportation costs account for 7.7 percent of global GDP ........ Although China’s policies appear to have been effective for less infectious variants, they no longer apply to Omicron. Approximately 40% of Chinese people over the age of 80 have not received a single dose of the Covid vaccine, and approximately 50 million citizens over the age of 60 have an inconsistent vaccination schedule. Inadequate vaccination of the elderly indicates a vulnerability, implying that China will not fully open. ....... Until then, global reliance on China and supply chains has resulted in a perfectly timed lockdown that has brought global supply chains to a halt. Furthermore, the immediate increases in freight prices will gradually, if not immediately, result in an increase in the global price of goods. China is now at the helm of an economic upheaval that will begin to have a ripple effect throughout the world. As the one-month anniversary of Shanghai’s lockdown approaches, the rest of the world will begin to feel the effects of its supply chain woes.
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