Yesterday, Patricia Cohen wrote an article for the New York Times entitled Chinese Unrest Over Lockdown Upends Global Economic Outlook. In this article, Cohen talks about the recent protests in China and how this is leading to global instability and how this friction so far away can impact our daily lives.
These protests are caused by a fire in an apartment complex that occurred last week. In this fire, ten lives were lost. Many citizens point to China's three year COVID-19 lockdown as a potential factor in these deaths. Some believe that this protest could potentially lead to a larger resistance against China's top leader, Xi Jinping, who has come under fire for being an extremely strict leader.
In many ways, China is known as the "global factory." Many companies turn to them to make the "best and the cheapest" products. If these protests continue, economists believe that we could see the slowed-down production and distribution of integrated circuits, machine parts, household appliances, and more. China is also the world's largest importer of petroleum, which is another reason why there is so much global worry surrounding these protests in China.
The energy crisis and vast amounts of inflation that the war in Ukraine has sparked. This is something that we have all felt when we fill up our cars with gas, or when we go grocery shopping. Cohen believes that the United States and Europe may be enticed to disengage from China and to quickly diversify their supply chains, much like how they were forced to when the war in Ukraine began earlier this year. As of right now though, John Kirby, the coordinator for strategic communications at the National Security Council, has issued a statement saying that "“We don’t see any particular impact right now to the supply chain.”
https://www.nytimes.com/2022/11/28/business/economy/china-unrest-global-economy.html
Interesting thought about it. I totally agreed with you, and that is why I think we should not have or rely on a major importer of necessary goods especially petroleum.
ReplyDeleteI wonder how long it will take for us to feel the impacts through the supply chains. Obviously, they say there is none now, but how long until this becomes a global problem?
ReplyDeleteThe US gets a lot from China in terms of goods. If manufacturing slows in China, could some manufacturing jobs return to the US?
ReplyDeleteI think the effects we are going to feel here in the U.S. are going to be drastic. This is also further emblematic of the damages that can be done by strict Covid policy and strict government policies writ large.
ReplyDeleteChina has had a "zero-covid" policy in effect for quite sometime. This policy is extremely restrictive and suppressive to individuals in China. If one person in a region tests positive, that entire region is subject to being shut down in response. It is, therefore, not surprising that this event finally sparked protests against the policy and the government when the people have been unhappy for quite some time. It will be interesting to see how far the protests go and how long they last.
ReplyDeleteMost people that don't pay attention to the news will not realize how much this will impact our daily lives in America. It is so important to read and understand the impact these events will have on the global economy, which is why I enjoyed you posting this.
ReplyDeleteI think this post shows just how globalized the economy is. The prices that we see as consumers are influenced by significant events abroad. Hopefully the U.S. doesn't suffer too much from ongoing protests and consequent supply chain issues in China.
ReplyDeleteI did not think about a consequence of the lockdowns being additional supply chain issues. It will be interesting to see if this causes a shift in the world's manufacturing dependency on China.
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