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March 9, 2020

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.

By Hannah Abdulla

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.

Free Whitepaper
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What is the impact of China’s Zero-COVID lockdowns on economic activity, consumer goods and the foodservice industry?

While wanting to protect the country from being overwhelmed by Omicron, China’s adherence to a Zero-COVID policy is resulting in a significant economic downturn. COVID outbreaks in Shanghai, Beijing and many other Chinese cities will impact 2022’s economic growth as consumers and businesses experience rolling lockdowns, leading to a slowdown in domestic and international supply chains. China’s Zero-COVID policy is having a demonstrable impact on consumer-facing industries. Access GlobalData’s new whitepaper, China in 2022: the impact of China’s Zero-COVID lockdowns on economic activity, consumer goods and the foodservice industry, to examine the current situation in Shanghai and other cities in China, to better understand the worst-affected industry sectors, foodservice in particular, and to explore potential growth opportunities as China recovers. The white paper covers:
  • Which multinational companies have been affected?
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  • What is the effect of lockdowns on Chinese ports?
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  • How have Chinese consumers reacted?
  • How might the Chinese government react?
  • What are the potential growth opportunities?
by GlobalData
Enter your details here to receive your free Whitepaper.

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.”

Related Companies

Free Whitepaper
img

What is the impact of China’s Zero-COVID lockdowns on economic activity, consumer goods and the foodservice industry?

While wanting to protect the country from being overwhelmed by Omicron, China’s adherence to a Zero-COVID policy is resulting in a significant economic downturn. COVID outbreaks in Shanghai, Beijing and many other Chinese cities will impact 2022’s economic growth as consumers and businesses experience rolling lockdowns, leading to a slowdown in domestic and international supply chains. China’s Zero-COVID policy is having a demonstrable impact on consumer-facing industries. Access GlobalData’s new whitepaper, China in 2022: the impact of China’s Zero-COVID lockdowns on economic activity, consumer goods and the foodservice industry, to examine the current situation in Shanghai and other cities in China, to better understand the worst-affected industry sectors, foodservice in particular, and to explore potential growth opportunities as China recovers. The white paper covers:
  • Which multinational companies have been affected?
  • What is the effect of lockdowns on foodservice?
  • What is the effect of lockdowns on Chinese ports?
  • Spotlight on Shanghai: what is the situation there?
  • How have Chinese consumers reacted?
  • How might the Chinese government react?
  • What are the potential growth opportunities?
by GlobalData
Enter your details here to receive your free Whitepaper.

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