Even at the risk of passing for prophets of doom, HSBC economists warn everyone: the world economy risks the mother of all shocks in the supply chain. It seems to review the darkest pages of the Covid era, with a two-year jump back. Because the danger still comes from China. The iron fist with which Beijing is facing the spread of Omicron is not a free meal: one comes out of the domestic cloister by submitting, on a frequent basis, to mandatory tests. And the worst is yet to come in the form of a proliferation of lockdowns and quarantines, according to Deustche Bank. Also to convince that 20% of Chinese not yet vaccinated. In fact, companies are starting to run out of breath and fear that the six trillion dollars thanks to which trade in goods with foreign countries increased last year (+1.400 billion on 2020) are now like a yellowed photo, allowing a record trade surplus of 676 billion (+ 30%).
Figures from how we were difficult to replicate if the recovery slows down sharply. The signs are all there. In the port areas, the launch pad from which the Dragon led by Xi Jinping exports made in China everywhere, the barometer is already showing a storm. In Ningbo, one of the largest maritime hubs, factory closures and gas supply blocks have already occurred. Due to the turtle movement of goods in the busiest ports, such as Tianjin (it is the city where the first outbreak of the latest variant was found), shippers seek outlets elsewhere, diverting supplies to Shanghai. And it is precisely there that new bottlenecks are being created after the – frightening – ones of last summer that had caused an unprecedented clogging of container ships off the Californian coast. Already, the delays in deliveries to Europe and the USA of one week seem to be the harbingers of that very strong shock in the logistics chain foreseen by HSBC. The tipping point would be passed if Omicron’s roll-out caused a disruption of Chinese manufacturing. “Temporary stops, but extremely disruptive in the coming months”, underline the experts of the banking giant. Some companies are running for cover looking for alternative manufacturing facilities, but after chip makers in Xi’an city, it may now be the electronics centers in Henan and Guangdon that raise the white flag, with a possible impact on iPhone supplies. A déjà vu.
Thus, in the face of a worsening of the situation in China, central banks may be forced to change their strategy. In particular, the Fed, which has three to four rate hikes in the pipeline for 2022. Although JPMorgan Chase CEO Jamie Dimon is going against the grain by not ruling out six to seven squeezes this year. A blow to America.