China New Lockdown: Another Global Supply Chain Crisis to Bring Chaos

As if the previous supply chain crisis and surging inflation were not enough, the world is about to see a new wave of supply chain chaos as the hub of global manufacturing, China, goes into further lockdown.

The omicron variant has disturbed the biggest population of the world, and the consequences are to be felt in the United States, where shelves in most stores were already empty, with inflation breaking all records.

China New Lockdown: Another Global Supply Chain Crisis to Bring Chaos

Beijing Olympics can Force China to go to Dangerous Route

The vulnerable omicron has invaded China, where the Beijing Olympics are about to start in a couple of weeks.

With the ambition of not disturbing the schedule of the event, the Chinese government has announced a zero-tolerance policy for lockdown, as more than 20 million Chinese go into the lockdown.

For America, an all-out outbreak of omicron in China is a dangerous thing, as many top-notch industries are likely to get a lethal blow.

The US may have boycotted Beijing Olympics diplomatically, but a virus at the event would plummet the US economy.

Currently, the Xi’an city and Henan province are the worst impacted with lockdown, and the latter one is detrimental to the industries like Samsung, Micron Technology, and some commercial aircraft equipment.

However, the American nightmare lies in the lockdown of cities that have export-oriented economies.

A potential lockdown in cities like Tianjin or Shanghai is problematic for America.

Right after the outbreak of coronavirus in Wuhan, China relied on tactics like complete lockdown, aggressive contact tracing, and quarantines to get rid of the virus. And the country is likely to go on the same path if the current strain goes out of control.

Being not so democratic a country, China can also report fake numbers to open up its cities to not disturb the schedule of the Beijing Olympics, as it would be a significant financial loss for the country.

Thus a country mainly motivated by the surging economic indicators is likely to walk this path if lockdown does not go as planned. However, this strategy would be a recipe for global suicide, as it will increase the cases and the deaths at the end of the day.

China New Lockdown: Another Global Supply Chain Crisis to Bring Chaos

A Rare Opportunity for China and US to Mend their Relations

When cases in China go up, America has to worry about some important things. First, Chinese vaccines are highly ineffective against the omicron variant, and even if their booster doses are administered, they are highly unlikely to curb the omicron spread.

This is the golden opportunity for both the countries to repair their relations, as America can give Pfizer doses to China if the latter is willing to accept.

However, this would require a recalibration of foreign policy at the end of both countries. A sense of mutual trust needs to be established if vaccine diplomacy between China and America has to be built, which seems a herculean task right now.

If this does not happen, supply chain chaos is bound to happen at global ports, as the likes of Toyota and Volkswagen have already announced stopping their production in some Chinese cities.

Now the industries which were giving them raw materials will be bound to scale down their production as well. And the chain will continue, which will disrupt many businesses.

Worker shortages in America were already worsening, and now more workers can leave their jobs, contributing further to the great resignation crisis.

Once this chaos is averted, the countries will resume their production, and the oil inflation will happen just like it did once companies started back after the lockdown recently.

 

Final Thoughts

A sense of chaos has started penetrating the world as the omicron strain invades China. It is surely not good news for Democrats, who were already trying to regain ground after a messy first year, which was also disturbed due to the supply chain crisis.

All the problems which Democrats are facing currently are somehow related to the supply chain chaos of the previous year, and the latest events will once again increase their suffering.

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