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China is one step away from the perfect storm. The removal of the anti Covid 19 measures has triggered chain infections. The official figure of 5,267 dead since the beginning of the epidemic does not reflect reality, especially as by 31 March the Government announced its intention to financially support 60% of the treatments. The fuse has already exploded with the migrations of the Chinese New Year which, starting from Saturday, will last 40 long days: for the first time in three years there will be no travel restrictions, with the risk that the outbreaks will spread to the most remote areas of the villages.<\/p>\n
The borders were reopened - on Friday also the one with Hong Kong - but the population remains at risk of variants from Covid 19: just 57.9% of adults have a booster, only 42.3% under eighty are vaccinated. Goods in ports do not arrive or remain blocked as factories decimated by the virus slow down production and orders remain unfulfilled. Thus a worse situation emerges than that of last spring, with inevitable repercussions at the level of global trade and stocks which is creating a turnaround in container traffic and freight costs. Prices are plummeting and a surplus of ghost carriers is wandering across Asia. The reassurances of the local press that the ports remained competitive in 2022 despite the pandemic are worthless.<\/p>\n
Trivially, factories cannot function properly due to the many workers who have contracted Covid. After the Lunar New Year traffic volumes are expected to be low with bookings at best delayed into the second half of January if not early February. The drop in orders from the United States is already 40 percent. With half to three-quarters of the workforce infected and unable to work, it's difficult to ensure optimal results, Hong Kong-based shipping company HLS tells worried customers. Picking, loading and transporting containers end up in the meat grinder of companies that are dealing with the impact of the new wave of Covid 19.<\/p>\n
In the port of Shanghai, the world's container leader, cancellations are increasing because many workers have been infected. Ditto Shenzhen, fourth in the world, home to the manufacturers that supply Apple. In Qingdao, the sixth largest airport in the world, only a quarter of the workforce is active. According to MarineTraffic, a company that monitors maritime traffic, congestion in Shanghai seems to have increased as soon as the obstacles to mobility were removed, in fact during the first week of 2023 the average capacity of the vessel measured in TEU (the equivalent unit to twenty feet ) outstanding was 321,989 TEU, the highest amount recorded since last April. Furthermore, congestion in Ningbo and Qingdao is also growing, at 273,471 TEU and 277,467 TEU respectively.<\/p>\n
Data from WarehouseQuote which guarantees the goods warehousing shows, however, that inventories are still at an all-time high. But until when? China insists and leverages the resilience that allowed it to save the 2022 budget in extremis. Looking to 2023, explains Wu Jiazhang, Chinese logistics expert, if the US and European markets were to give way again due to the recession, exports could still find new growth space from markets with the Regional Comprehensive Economic Partnership (RCEP) trade agreement and Belt and Road markets. The new demand could arise from the rapid development of cross-border e-commerce and increased efficiency in ports due to improved digital infrastructure. In reality, in the middle of a maritime season officially defined as \"very quiet\", the Government's about-face fell on zero Covid. In fact, empty containers have been piling up in ports ever since. In Guangzhou, Yantian and Shekou, they no longer collect them because a \"next shipment\" is not in sight.<\/p>","protected":false},"excerpt":{"rendered":"
China is one step away from the perfect storm. The removal of the anti Covid 19 measures has triggered chain infections. The official figure of 5,267 dead since the beginning of the epidemic does not reflect reality, especially as by … Continue reading