Supply chains in China see huge disruptions on coronavirus - Just Style
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Supply chains in China see huge disruptions on coronavirus

By Hannah Abdulla 09 Mar 2020

Supply chains in China have seen significant disruption over the last month as a result of the coronavirus outbreak, according to the latest data from supply chain tech company Tradeshift.

Supply chains in China see huge disruptions on coronavirus

Supply chains in China have seen significant disruption over the last month as a result of the coronavirus outbreak, according to the latest data from supply chain tech company Tradeshift.

Cross border and domestic trade activity in China fell by more than half during a single week in February, according to the company.

Analysis of business-to-business payment data in the region, carried out by Tradeshift’s analytics team, shows the volume of Chinese domestic and international transactions processed across its network fell by 17% between January and February as factory closures aimed at stopping the spread of the coronavirus amplified traditionally slow trading conditions around Chinese New Year.

Week-on-week analysis reveals overall trade activity in the region fell by 56% in the week commencing 16 February following a period of steady decline throughout January. Domestic supply chains were particularly badly affected, with orders placed between local businesses falling by 60%. The number of transactions between Chinese businesses and international firms dropped by 50% during the same period.

China is the biggest apparel exporter in the world, exporting apparel and textiles worth US$118.5bn in 2018. No other country can match its supply base, its range of skills, its quality levels, its product variety and the completeness of its supply chain – or has the capacity to absorb its business. The country continues to appeal to apparel buyers as rising wages are largely being offset by efficiency and productivity gains through advanced manufacturing technologies. 

Tradeshift says that while there are some suggestions that things are getting back up and running, there is a lot of ground to make up. 

“The sheer speed at which the coronavirus took hold in China has sent a shockwave through the delicate ecosystem of complex supply chains spanning the globe,” says CEO Christian Lanng. “Inflexibility does not deal well with uncertainty, and as the virus threatens to become a pandemic, many businesses are finding that their inability to identify and connect with alternative suppliers quickly enough is having a tangible impact on production. We are actively working with a number of our customers to help them build contingency into their supply chains through our network.”