Blockage in China causing ‘ripple-effects’ worldwide

China’s zero-Covid regulations can cause disruptions to supply chain recovery worldwide. Analysts believe that any minor trouble in the country can provoke global “ripple effects.”

According to the head of shipping at HSBC, China’s restrictions will impact global supply chain recovery across the world.

Global head of shipping and ports equity research at HSBC, Parash Jain, talked about the issue. He said that the pandemic revealed how thin the supply chain has become. He added that there is little margin of error.

On Monday, Jain told CNBC’s “Squawk Box Asia” that any minor disruption would negatively affect the supply chain. He also talked about the importance of China when it comes to global trade. Jain said that as long as China maintains a zero-Covid stance, it cannot rule out a disruption.

Worldwide disruptions and the role of China in it

The world’s second-largest economy increased its zero-Covid strategy due to current spikes in infections in the country.

The largest trade hub in China, the port city of Shenzhen, has been the site of numerous reports of Covid cases. Reports began to surface a lockdown in the city’s key port hubs. Reports indicated that the government ordered the closure of all port-related businesses in the city. It resulted in the lockdown of key port locations. The government later expanded restrictions to include all business related to ground transportation, resulting in the lockdown of all ground transportation within the city.

According to the national health authority, China reported 59 new Covid-19 cases on Monday. In its daily update, the National Health Commission said 45 of the new cases were local infections, with the remaining 18 coming from overseas.

According to Our World in Data, China has a 7-day average of 0.05 daily cases per million people, compared with 568.9 for Japan, 290.42 for South Korea, and 180.36 for India.