Economic activities in China have come to a standstill due to the lockdown and its direct effect is visible on the world’s supply chain.
Adidas sneakers, Bang & Olufsen speakers and from Toyota to Tesla are influenced by it.
Let us know what is the effect of China’s lockdown on the world.
There is a lockdown in 27 cities of China
Let us tell you that from the end of February, corona cases started increasing in China. After this, China imposed a lockdown in many cities, implementing the zero-Covid policy .
After that the city of Shanghai was locked down in early March. At present, a total of 27 cities in the country are under lockdown. Due to this, more than 18 crore people are imprisoned in their homes.
In such a situation, the supply from China to the world is being disrupted.
Construction projects being affected by China’s lockdown
Construction projects are being affected by China’s lockdown. This has had a direct impact on Phipps International, an American firm that supplies luxury bathroom faucets and kitchen countertops to high-rise buildings. The company has not been receiving shipments from taps from Shanghai for several months.
The company’s founder, Jake Phipps, says that all construction projects in the US are stuck waiting for the supply of raw materials.
Time is being increased again and again – Phipps
According to NDTV , Jack Phipps says that the time of supply of raw materials from China is increasing time and again and now even after 40 days the supply has not been done. Mold factories for taps opened last week, but they have not been ready due to the closure of chrome-plated and polished factories.
He said that the lockdown is the biggest issue. Truckers are not carrying goods to avoid Corona.
Raw materials are being procured from other countries instead of China
Jack Phipps said delays in supply of raw materials are delaying US construction projects. He is shifting some production to Vietnam. Similarly, instead of China, Italy, Brazil and Turkey are buying raw materials.
Raw material is not available for clothes and shoes
Due to the lockdown, raw material for making clothes and shoes is also not being able to go from China. As a result, clothing and footwear factories in Vietnam are unable to fulfill orders.
According to the American Textile and Footwear Association, China is the second largest supplier of clothing and footwear to the United States. Its goods make up more than 1,000 brands of clothing and footwear. This includes many major companies like Adidas sneakers.
Technology and sports equipment is also having an impact
China’s lockdown is also having a bad effect on companies making technology and sports equipment. Companies ranging from Microsoft to Texas Instruments Inc say the lockdown will cut sales and make it difficult to produce products like Xbox.
Apple Inc said last month that supply constraints caused by the lockdown would result in a loss of US$4-8 billion in revenue.
Sony lowers PlayStation 5 sales target
Due to non-supply of raw materials, Sony Group Corp. lowered the sales target of its flagship PlayStation 5. The Nintendo company also said that the situation in Shanghai has had some impact on sales. This is a serious issue.
The lockdown also disrupted the supply of medical services
China’s lockdown has also had a bad effect on the supply of medical services. Hospitals from the US to Australia are facing a shortage of chemicals used in X-rays and CT scans due to the lockdown.
According to the Greater New York Hospital Association, due to the lockdown, there is no supply of Omnipack, a chemical used in X-rays and CT scans. It is produced only at the GE Healthcare factory in Shanghai.
Sales of luxury stereos and TVs were also affected
Luxury stereo and TV set maker Bang & Olufsen this week cut its financial outlook due to the lockdown in China.
The Danish company, which sells speakers for $110,000 a pair, says the lockdown has hurt not only local sales, but also in markets outside China. Logistics problems are being faced due to the lockdown.
Auto sector is also hit by lockdown
China’s lockdown has had a bad effect from auto company Volkswagen to Toyota Motor Corp.
Tesla Inc’s plant in Shanghai was closed for three weeks last month, causing major trouble. The company is unable to supply the cars and deliver the equipment. Tesla’s factory in Shanghai has been able to make only 1,512 cars in April as against 60,000 cars.
Similarly, Toyota’s business has declined by 20 percent.