Chinese lockdowns stoke supply chain struggles

Global supply chain woes will be exacerbated by the China’s latest lockdown in response to Covid-19, says Fitch Ratings.

In a new report, the rating agency said that the lockdown of Shanghai, which handles about 20% of China’s port volume and 15% of world exports, has led to a “plunge” in freight traffic in April and May.

“With fewer trucks operating and Shanghai’s port staff unable to load and unload ships at their usual pace, significant backlogs have built up at the Port of Shanghai,” it reported.

Fitch said that most of the effects of this disruption has yet been reflected in global data, but that it will.

Ultimately, these latest disruptions mean that, “shortages of manufactured goods could intensify, adding to existing global inflationary pressures,” Fitch said.

While slower growth in China will ease commodity demand and price pressure, the added supply chain issues will outweigh this effect, it noted.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.