Chinas battle with new Covid strain sparks two-week supply chain delays and shortages

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An outbreak of the coronavirus Delta variant in China has forced the country to introduce new lockdown measures, damaging trade. The provincial government of Guangdong introduced strict new restrictions with over 100 coronavirus cases were recorded since late May. The banning of flights and movement between some communities have had a serious impact on the local economy and the trade links of Guangdong province and its capital city, Guangzhou.

Nathan Resnick, CEO of Sourcify, told CNBC News that supply chains had been severely impacted by the sudden and severe restrictions. 

He added that the situation would make advance planning for businesses difficult in the coming financial quarters.

He said: “We’re starting to see a trickle-down effect, and really there’s coming ripple effects.

“Especially with the holiday season up and coming a lot of major importers are really trying to plan their supply chain for Q3 and Q4.

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“And so this can have big effects on their supply chain.”

When asked which industries were likely to be the most severely affected he replied: “Right now in Guangzhou and Guangdong… it’s mostly home goods, shoes, consumer electronics, and many other types of products.

“The freight rates from last year have spiked significantly.

“The cost of a 40ft container compared to last year is up over 150 percent.

“To the west coast and even more to the east coast.

“These port delays are going to cause more increase in freight rates and that’s something we’re seeing continuous throughout the year.”

Resident in some streets in Guangzhou have been instructed to isolate in their houses, with only one person from each household permitted outside to buy essentials.

The city’s 15.3 million residents have been barred from all travel without a ‘green code’ on China’s Covid app and a negative coronavirus test.

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After the initial outbreak of COVID-19 in Wuhan in 2020, China has been largely successful in suppressing the virus.

Since the beginning of the pandemic, China has recorded 91,248 Covid cases.

This figure does not, however, include asymptomatic cases.

The Chinese government also claims that only 4,636 people in the country have died from Covid.
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