China’s “zero-COVID” policy and strict lockdowns could play a key role in surging global inflation, even more so than at the start of the COVID-19 pandemic in 2020.
Bernstein analysts wrote in a note of the 8th outlook versus what we’ve seen in 2020, according to a CNBC report on Friday.”
As the rest of the world eases COVID-19 regulations and restrictions, rising COVID-19 cases have forced China to step up efforts. China’s zero-COVID policy has managed a surge in cases across the country that has prompted what some would call extreme lockdowns.
China lockdown and its dissatisfaction pic.twitter.com/MkOvqEqKLh
ian bremmer (@ianbremmer) April 14, 2022
Key economic and import/export regions in China have been particularly hard hit, leading to further lockdowns and supply chain fighting. As a result, many foreign companies in the region were forced to either stop or slow down production and their deliveries were delayed.
“The macro impact of lockdowns in China could be quite high and something the market is not yet pricing in,” the analysts wrote.
Bernstein’s report found that export container costs from Shanghai are five times higher and air freight twice higher than pre-pandemic prices.
According to Bernstein, China also manufactures most of the containers, ships, rare earth elements, solar panels, mobile phones and personal computers that affect daily life around the world.
“Therefore, there would be higher inflation exports, particularly to China’s major trading partners, but at the same time China’s own demand recovery would be delayed,” the Bernstein note said.
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https://www.ibtimes.com/impact-chinas-continued-covid-lockdowns-could-be-much-higher-global-inflation-analyst-3475799?utm_source=Public&utm_medium=Feed&utm_campaign=Distribution Impact of China’s ongoing COVID lockdowns ‘could be much higher on global inflation’: analyst