China’s new lockdown will exacerbate input shortages, global inflation – News

Recent closures of cities Shanghai And Beijing To contain a new wave of pollution by Covid-19 could aggravate the adverse situation faced by the national and global economy.

In the opinion of experts, the The “Covid Zero” health policy adopted by the Chinese government It will hurt the global supply chain again, result in new shortages of inputs to the production chain and, in turn, raise prices even more.

Maintaining isolation measures will deteriorate the logistical conditions for intermediate goods and products in the world, says Josilmar Cordenonssi, Professor of Economics at the CCSA (Centre for Social and Applied Sciences) at Mackenzie.

Everything that China produces, exports or imports will be banned. The professor explains that the waiting time for ships for goods in ports will increase, which will increase the cost of logistics and reduce the supply of products in the world, which will lead to higher prices.

Total shutdowns have already led to revisions to the growth outlook for the Chinese economy this year to less than 4%. Shanghai is a big port, and the shutdown will have a huge impact on local GDP. […] Since China has a very large share of world trade, it will affect the rest of the world, Cordonsi laments.

Patricia Krause, chief economist at Cofase, points out that Shanghai accounts for about 27% of Chinese exports, which will lead to supply chain bottlenecks at a pace of improvement. “Difficulty in obtaining goods raises the cost of transportation and ends up creating new pressures for global inflation,” he analyzes.

The lack of parts and chips for the production chain cited by economists is the same that still plagues a part of industries. In Brazil, the automotive sector has been one of the sectors hardest hit by Covid-19. For example, Anfavea (National Automobile Manufacturers Association) still cites the scarcity of raw materials as one of the obstacles to national production.

The companies are trying to implement their plans despite the lack of components and semiconductors. During the recent announcement of the sector’s results, Marco Saltini, Vice President of the entity, said that the logistics areas are working so that we can produce.