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"China Paralyzes By Panic As Millions Struggle To Buy Groceries"
by Epic Economist
"Over 13 million people are under strict stay-at-home orders in China as the country struggles to contain the spread of new virus infections ahead of the Winter Olympics. The city of Xi'an, in northwest China, is entering its second week of lockdown, and millions of residents are running out of food, medicine, and other essential supplies. The chaotic situation looks a lot like the 70-day Wuhan lockdown back in the spring of 2020, when millions of Chinese citizens were prohibited to leave their homes and were left without access to basic resources for weeks.
Authorities have enacted sweeping measures with an intensity and on a scale rarely seen since Wuhan, as Beijing sticks to its zero-tolerance policy and prepares for the international sporting event that starts in February. The city has been on total lockdown ever since, and its 13 million residents are only allowed to leave once every few days to buy essential goods and get tested. But conditions have been exceedingly painful for many locals, who haven't received any sort of aid to get food and medical supplies as the city life grinds to a halt.
The government said that local officials would deliver free food to residents in sealed areas, but a large number of people still face difficulties getting daily necessities. Many other desperate Xi'an residents have resorted to Weibo social media platform to complain about order delays and to call for help with getting other medical care. Hundreds of thousands of online food orders have reportedly gone undelivered, and some people exposed on the social media platform that in the few grocery stores that are still open, there has been a panic buying of food staples and household products, despite the government saying new supplies would be brought in soon.
The Chinese government admitted that due to "low staff attendance and difficulties in logistics and distribution" there have been significant problems in providing essential supplies to several areas of the city. Meanwhile, Xi'an citizens are also being affected by disruptions in health services. Since all resources have been diverted to deal with the new wave of infections, many have completely lost access to medical care. Several facilities have stopped accepting new or transferred patients, resulting in a worrying backlog of untreated patients. Many kidney disease patients, who urgently need treatment, are now in an extremely delicate situation. Others, who also suffer from chronic illnesses, have been "begging for help online".
To make things even worse, the new measures are raising the specter of further disruptions to an already stressed global supply chain. Several factories are being shut down and two of the world's biggest chipmakers are warning that the new restrictions and strict lockdowns are hampering their operations and aggravating supply chain problems. On Wednesday, Samsung said that it was forced to temporarily shut down operations in Xi'an, which is also a major industrial hub of the country. "Any slowdown in the production risks worsening the global chip shortage, an ongoing crisis that has limited the supply of everything from iPhones to new cars," it said in a note. Similarly, the American chipmaker Micron also said that Xi'an's lockdown is impacting the production of its DRAM memory chips, which are used in computers, as the company has had to reduce its workforce at the site.
If restrictions start being introduced at ports again, American consumers are going to be particularly hard hit. “The rising infections may lead to shutdowns at Ningbo and some other ports in China, adding to congestion and cargo backlogs,” a source from a logistics company told S&P Global Platts, an analytics firm. “This is only the beginning -- the first quarter of 2022 is going to be a complete wreck.” “The global supply chain recovery relies on China,” explained Atul Vashistha, CEO of Supply Wisdom, a New York-based risk intelligence company. “That’s an alarming and troubling truth considering China’s centricity to the supply chain. While it may be a sound public health policy, China’s zero-tolerance covid policy makes supply chain matters worse.”
As China termed the new virus surge as "the biggest national threat" at the moment, more restrictions may soon be imposed all over the country. We're effectively starting 2022 with the threat of further disruptions to our supply chains, more empty shelves, rising prices, and widespread panic on global markets. This is going to be another exceedingly challenging year, and the problems we faced in 2020 and 2021 will be nothing compared to what we are about to witness."
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