zerohedge.com: China is actively hiding information about what is happening in the country now, and the data on the development of the epidemic in the world are still contradictory. However, it is already possible to say directly and for sure: the economic Armageddon has begun!
In today's globalized world, the economies of countries are interconnected as never before. There are many “single points of failure” in these complex and global operations, many of which originate from China.
According to Reuters today, a new poll conducted through the Shanghai American Chamber of Commerce (AmCham) found that 50% of US companies operating in China say the shutdown of factories in the PRC due to the Covid-19 outbreak has affected their global operations.
For example, about 78% of American firms warn that they currently do not have enough staff to resume full production. And if this production is not restored in full and in the very near future, in a few months all Western markets will face a real shortage of products.
Many of these surveyed companies (around 109 in total) operate in Shanghai, Suzhou, Nanjing and the Yangtze River Delta. In these regions, there is currently a massive quarantine of citizens, industrial centers are closed and transport networks are stopped.
“The biggest problem is the shortage of workers as they are subject to travel restrictions. This is the number one problem identified in the survey. Anyone arriving from outside the area is subject to a 14-day quarantine,”says AmCham Ker President. Gibbs.
“As a result, there is an acute shortage of workers at most factories. This will have serious implications for global supply chains that are just beginning to emerge."
As we noted earlier this month, many companies were planning to resume production last Monday, and full recovery was expected by the end of this month. However, this is likely not to happen, and much of the world's complex supply chains will plunge into chaos.
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The economic impact of the closure of large industrial centers in China, where more than 400 million people are quarantined (more than 700 million have been quarantined according to recent reports), are causing a huge shock that could lead the global economy into recession. These disruptions will lead to a drop in global trade growth.
The recession bells are already ringing in Japan and Singapore, and it looks like the two countries are on the brink of disaster. But supply chain problems are spreading from China to the West as well.
Several auto plants in South Korea were shut down last month because they could no longer receive parts from China. A few days ago, it was reported that the Fiat Chrysler Automobiles plant in Serbia was stopped due to the fact that it ran out of spare parts from China. It was also reported that General Motors may stop some operations in the United States, as the company has ceased to receive important components from China.
As we noted on Sunday night, the world has witnessed a “horrific end to globalization”. The trade war and the impact of the virus on global supply chains have turned globalization into de-globalization, which will inevitably trigger a worldwide recession.
US firms with disrupted operations in China are already working on contingency plans to realign their operations outside Asia and adopt a more localized approach to spare parts supply. The AmCham poll also says that American companies operating in China are already preparing for a cut in annual revenue due to current and projected disruptions.
Summing up, we can say that breaking a complex supply chain with an international exposure will lead to a decrease in the growth of world trade and an increase in de-globalization, which could provoke the next financial crisis.
Editorial comment
The fact that global supply chains are disrupted, that China has stopped buying hydrocarbons and the oil market is waiting for a collapse, that the epidemic is creeping out of China and further our readers know very well even without Zerohedge: not only is it all about it now. the press and renowned economists mumble from every angle - it's all obvious. The point is different.
As this uncle, for many years and professionally engaged in the ritual of cryptocurrencies, broadcasts, in the near future the most relevant money will be canned food, which he personally already buys. And the reason is as follows.
The global economic system has exhausted itself and has long demanded a reboot. That is, all currencies, including crypto, for one reason or another, a kerdyk will be announced, after which the globalists will throw off the bonds of debt obligations, straighten their shoulders and start building everything anew.
But for such a maneuver, the globalists need, as it were, a Starting Event, which will be attributed to the loss of all contributions by citizens, the chaos that has begun and, as a result, the draconian measures of the authorities against the raging public.
Perhaps and most likely, Covid-19 is precisely the very Start Event that all conspiracy theorists have been waiting for. It all happened artificially or the globalists will simply seize the moment - this is already a topic of discussion. The main thing is that Covid-19 is most likely the beginning of what is called the New World Order, so we are following the development of events.