Chinese lockdowns fuel global supply chain chaos

China’s ‘zero Covid’ policy fuels global supply chain chaos as lockdowns are extended

China’s ‘zero Covid’ policy is threatening to throw global supply chains into fresh chaos as lockdowns are extended.

Restrictions imposed a fortnight ago were limited to Shanghai, but factories in nearby Kunshan are being forced to shut after rules were extended.

That could be a disaster for global business, as manufacturers in Kunshan supply components for all kinds of electronic devices. 

Grounded: 500 container ships are stuck outside Chinese ports spelling disaster for global business

Already, as many as 500 container ships are stuck outside Chinese ports as the zero Covid policy wreaks havoc.

Yesterday Pegatron, a major producer of Apple iPhones, suspended its operations in Shanghai and Kunshan. 

Dan Ives, analyst at Wedbush Securities, said the closures ‘throw gasoline on the raging fire which is the supply chain for Apple and other parts of the iPhone ecosystem’. Demand shot up after the initial lockdown ended.

But manufacturers have been struggling to find staff, and those in China face further lockdowns. This has caused delays to other businesses from car-makers to laptop producers.

Economists at Nomura now think 45 cities and 373m people are under some kind of lockdown in China.