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"Panic Buying Sweeps Across China As
Food Shortage Leaves Millions With No Food"
by Epic Economist
"A new panic-buying wave is rapidly spreading across China as food shortages get significantly worse amid new movement restrictions and the beginning of Beijing’s Winter Olympics. Millions of Chinese residents are currently facing a shortage of food and other daily essentials and having to pay some exceedingly expensive prices for what they can still find in stock. In Hong Kong, a new set of movement restrictions is preventing the entrance of truck drivers responsible for delivering supplies to local grocery stores. Recent mandates issued by authorities in mainland China are forbidding truckers to re-enter the territory after they leave to pick up supplies at distribution centers. And after some drivers tested positive for the virus, the Chinese government reimposed mass testing and isolation measures, exacerbating delivery delays.
Since Saturday, food supplies in the area have dropped as much as 70 percent, with supplies fresh produce and fruit being the hardest hit, according to Chamber of Hong Kong Logistics Industry vice chairman Chan Fu-chuen. The region relies on mainland China for more than 90 percent of its needs, and at this point, most vegetables and fish cannot be found anywhere. At the same time, prices of food staples have seen massive spikes, going up 30 to 50 percent in less than a week, while some perishable products, such as pea sprouts, faced even sharper increases, said Hong Kong Food Council chairman Thomas Ng. As fears of extensive shortages and new lockdowns emerged, residents have engaged in a new panic buying wave, further aggravating the situation. Local officials say that the new panic buying frenzy resembles what happened in 2020 when shoppers emptied store shelves in record time. Only this time, it is coming at a time when food supplies are already tight all across the nation. Demand usually peaks around the Lunar New Year Holiday and prices are typically higher as grocers struggle to restock inventories.
On top of that, the flow of goods has been slower as key ports have been closed or operating at lower capacity in recent weeks. On social media, Hong Kongers have been expressing their growing dissatisfaction. “We have done all you ask, we sat quietly as mental health takes a toll, as families are torn apart and as businesses close down because it is all in the hope of China reopening our borders," wrote one resident in an open letter that went viral. "You have tried for two years, and failed," it continued. "When will you stop holding the citizens of this city hostage?" he asked.
Many other regions of the country are also suffering from food shortages. Apparently, the situation is getting so out of control that it has been affecting athletes who are going to compete in Beijing’s Winter Olympics. This week, the Chinese government faced lots of criticism for not offering adequate food supplies for Olympic athletes. Supply chain experts say that port shutdowns in China are expected to aggravate the ongoing shortage of commodities in the next few weeks. Several shipping lines have suspended operations as at least three Chinese ports, including Shanghai and Shenzhen, remain partially closed.
In a recent note, HSBC’s head of shipping warned that “China’s restrictions will impact global supply chain recovery as any small disruption in the country will likely trigger shockwaves all across the world.” The health crisis has exposed “how lean the supply chain has become. And there is little margin of error,” said Parash Jain, global head of shipping and ports equity research at HSBC. “The sheer importance of China when it comes to global trade means that any small disruption in China, will have a ripple effect across the supply chain,” Jain said, adding that “the chaos created because of these restrictions will eventually have an impact on the other side of the ocean. That’s why, as long as China maintains this very strict zero-tolerance stance, we cannot rule out a disruption time to time as the year progress,” he added.
Our increased reliance on China is a disaster from the perspective of economic security and leadership in production. Now that the Eastern superpower is experiencing extended disruptions, each and every one of them will be magnified and rattle around the world, creating volatility and instability that will ultimately show up in shortages and price increases in our stores. In other words, China’s supply chain mess is about to disturb the American status quo in ways we could never imagine. And what we witnessed so far is the very tip of the iceberg."
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