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"Chinese Lockdowns Spark Panic Buying Frenzy &
Massive Shortages As Chaos Spreads Across Supply Chains"
by Epic Economist
"Once again, panic buyers are wiping out grocery shelves all across China after authorities announced new movement restrictions, lockdowns, and mass testing in several major cities as infection rates spiked to the highest level in over a year. Local reports are describing that crowded grocery stores are being completely cleared out as consumers stock up on household supplies to prepare for another period of social distancing. Millions of Chinese citizens are already under brutal lockdown mandates after an outbreak of the Delta variant linked to airport workers in Nanjing spread across the country. In a dramatic move reminiscent of the first days of the health crisis in China roughly 19 months ago, flights and trains in and out of several cities have been halted amid an unexpected rise in virus cases. Chinese authorities have also ordered mass testing in many cities across the nation, including Wuhan, where the virus was first detected before it spread around the world.
China is facing strict government-mandated shutdowns in several urban areas with scenes resembling the 2020 outbreak. The southeast region of the country is battling 144 medium- and high-risk areas, the NHC said. For that reason, authorities suspended all forms of domestic travel and public transport, including the inter-city coach, taxi, and online car on the high-risk areas of the delta variant spread. While millions upon millions get confined to their homes, mass testing has been launched across the country. In Wuhan, fears of strict restrictions, particularly of a stringent lockdown, led locals to start panic buying and leave the aisles of retail stores empty, creating a massive shortage of products.
Recent reports highlight that Wuhan residents were spotted stocking up on groceries, cleaning products, and other household supplies in preparation for the imminent restrictions. The Chinese city is battling its first surge of cases in more than a year. In 2020, its rigid but effective 76-day lockdown shocked the world but was soon replicated by many other countries. Photos from Wuhan on Monday showed supermarket shelves emptied by frenzied customers, in a repeat of scenes last seen during the panic buying wave registered before the city was cut off from the rest of the world for 2 and a half months last year. Back then, the shutdown brought domestic cases down to virtually zero, which allowed the economy to recover and life to return largely to normal. But now, locals that have been living in the former virus ‘ground zero’ have raided store shelves with memories from last year's abrupt lockdowns still fresh in their minds. Officials asked the population to “calm the panicked mood", arguing that stores had "promised" to keep prices and supply chains stable. However, many remained unconvinced.
The current restrictions also triggered a panic buying wave amongst retailers that import supplies from China. The shutdown of key ports is already causing shipping delays and shortages of several products, with the apparel sector being the hardest hit by the lockdowns. Garment and textile factories in China were temporarily closed without warning and workers were ordered to self-isolate. This has sparked chaos for apparel retailers in the US and the UK, especially for those who already have been struggling to get hold of the materials and components they needed before the restrictions were put in place. A third supplier warned that retailers will experience severe stock delays in the coming weeks and months. So far, shipping rates from China to the US have skyrocketed by 200 percent, and industry experts say that more price increases are expected given that global supply chains are in total panic mode due to the latest round of lockdowns and severe logjams at key ports in both extremes of the globe. Those shipping price hikes will soon be passed on to consumers if they haven't already. And in case the new virus outbreak isn't put under control soon enough, the U.S. supply chains will start to experience widespread shortages one more time. That is to say, we might soon witness a ravaging panic buying frenzy just as the one now happening in China and just as we have seen last year. If you don't want to find yourself battling over a can of beans or a package of toilet paper in a crowded grocery store, you should start getting ready right now, because things are spiraling out of control very rapidly."
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