Supply chain concerns resurface

With COVID infection rates rampant across China despite a strict lockdown approach by the government, worries over the impact to global supply chains have bubbled to the surface once again.

Mainland China reported the first decline in daily COVID infections in more than a week on Monday (28 November).

However, rates are still extremely high: the country said local infections, mostly asymptomatic, totalled 38,421, down from a record high of 40,052 reported for Sunday, according to reports.

Indeed, the capital city of Beijing saw infections rise on Monday from a day earlier, as did Shanghai, albeit at a far smaller scale. 

Shanghai Disneyland also said it would suspend operations from Tuesday, after briefly reopening Friday. Universal Beijing Resort remains open.

‘’Police in China have quashed mass Covid demonstrations for now, helping stocks regain their footing on indices across Asia… but with the strict Covid policy continuing there is every chance protests will bubble up again, adding another laying of complication for an economic recovery,” said Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown.

“Worries about fresh supply chain snarl ups have been weighing on investors’ minds as fresh waves of infections hit cities across China, with stocks on Wall Street falling back,” she added.

Apple is the example of how lockdowns can disrupt shipments given that iPhone production is reportedly taking another knock as its supplier’s megafactory in Zhengzhou is hit with a lockdowns and a workers’ revolt. Delays to shipments and long wait times for coveted products are inflationary pressures now creeping back despite high hopes we would be well over this bump in the road by now.”