Coronavirus: China’s manufacturing supply chain pummelled from all sides in efforts to restart
- Coronavirus costs keep mounting for manufacturers, who are facing huge losses in sales and struggling to ramp up production
- Logistical logjams persist as transport networks struggle to find workers and navigate lockdowns across China
Choked off from suppliers, workers, and logistics networks, China’s manufacturing base is facing a multitude of unprecedented challenges, as coronavirus containment efforts hamper factories’ efforts to reopen.
Many of those that have been granted permission to resume operations face critical shortages of staff, with huge swathes of China still under lockdown and some local workers afraid to leave their homes. Others cannot access the materials needed to make their products, and even if they could, the shutdown of shops and marketplaces around China means demand has been sapped.
“It really is death by a thousand cuts,” said John Evans, managing director of Tractus Asia, a company that has 20 years’ experience helping firms move to China, but which over the past two has had more enquiries from businesses looking to leave. “This is a black swan event and I don’t think we’ve seen anything like it in recent history, in terms of the economic and supply chain impact in China and across the globe.”
This is a black swan event and I don’t think we’ve seen anything like it in recent history, in terms of the economic and supply chain impact in China and across the globe
Australian company B&R Enclosures, which makes units for protecting industrial equipment, said the outbreak has cut it off from suppliers and delayed the return of its migrant workers from their hometowns, following the extended Lunar New Year break. Only 15 per cent of the migrant workers had come back, said B&R China general manager Marko Dimitrijevic said, although with most of the company's office workers having returned, he expects a full workforce by next week.