From a halt in car production to a delay in the delivery of Apple's mobile phones, the closure of Chinese factories means pain for American companies
In order to control the epidemic, it is said that some local government departments in China have informed some enterprises to continue to shut down. The prolonged manufacturing standstill is forcing us executives to look for alternative suppliers, but that may not be enough to stop the slowdown. Mark Williams, chief Asia economist at Kaitou macro, said: "the closure of factories may cause a sharp slowdown in China's economy in this quarter. Those (foreign) enterprises with decentralized supply chains are particularly vulnerable, as the delayed delivery of individual parts may be enough to stop all production. "
Manufacturers in China now face two problems: they can't get the raw materials or components needed for the production line; they also face a shortage of workers due to the travel ban in most parts of China. And because the closure of the plant is concentrated in Wuhan and surrounding areas where the virus originated, the production of many consumer goods, steel and other inputs is still in a state of suspension. "For many multinationals, the February disruption in China's industrial output highlights the risk that its global supply chain is overly dependent on China," said Rajiv Biswas, an economist
However, in many industrial production areas, the supply chain is highly refined and specialized, and there is no ready-made alternative outside China. In particular, this could lead to delays in the production of consumer goods such as cars and apple mobile phones, experts said.
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