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(CNBC)   China's 'Silicon Valley' manufacturing hub on lockdown over a Covid spike that would amount to a rounding error in any American state   (cnbc.com) divider line
    More: Scary, Communist Party of China, Mainland China, People's Republic of China, Republic of China, Hong Kong, Kuomintang, Beijing, Guangzhou  
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430 clicks; posted to Business » on 14 Mar 2022 at 6:06 AM (15 weeks ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook



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2022-03-14 8:42:27 AM  
If China indicates they are willing to keep their zero covid strategy indefinitely you'll see an acceleration of companies exiting China and looking for more reliable manufacturing capacity. Many were looking for alternatives to reduce risk amid geopolitical tensions between the West and China even if it meant some redundancy. These shut downs and travel bans seriously impact global business, and some added cost to manufacture is better than lost sales because you have no goods to offer. Just one more lever for inflation that has been hidden for a decade or so by the decades long expansion of Chinese manufacturing.
 
Juc [TotalFark]
2022-03-14 9:10:34 AM  
A bit funny that China has more of a regard for life than a number of states.
 
2022-03-14 9:53:51 AM  

soopey: If China indicates they are willing to keep their zero covid strategy indefinitely you'll see an acceleration of companies exiting China and looking for more reliable manufacturing capacity. Many were looking for alternatives to reduce risk amid geopolitical tensions between the West and China even if it meant some redundancy. These shut downs and travel bans seriously impact global business, and some added cost to manufacture is better than lost sales because you have no goods to offer. Just one more lever for inflation that has been hidden for a decade or so by the decades long expansion of Chinese manufacturing.



After what just happened with Russia I think you'd have to.  Risk posed by concentrating operations in China is far too great if sanctions are imposed.
 
2022-03-14 10:37:12 AM  
Average daily infections in the US are the lowest they've been since July 16th.  If it goes below 11,000, it will be the lowest since March 26, 2020.
 
2022-03-14 10:52:40 AM  

soopey: If China indicates they are willing to keep their zero covid strategy indefinitely you'll see an acceleration of companies exiting China and looking for more reliable manufacturing capacity. Many were looking for alternatives to reduce risk amid geopolitical tensions between the West and China even if it meant some redundancy. These shut downs and travel bans seriously impact global business, and some added cost to manufacture is better than lost sales because you have no goods to offer. Just one more lever for inflation that has been hidden for a decade or so by the decades long expansion of Chinese manufacturing.


The problem is that the tooling for these kinds of manufacturing will take a long time to make and spin up, and honestly, I'm not sure we have the people to compete with how much manufacturing would be lost if China were unavailable for awhile. The good news is that there are high tech industries that do have manufacturing in the US, just at a much smaller scale. It would also make everything suddenly much more expensive, exacerbating the inflation issue. 

US Manufacturing has been on the rise since the 2000's, but not at a huge rate. As the middle class continues to expand in China, you'll see the need for higher wages, and thus less of an advantage in mass manufacturing that they have now - this will especially be true as the current working generation ages out (as they have far fewer replacements waiting). I think eventually we'll see more of a return to equilibrium as the years go by and a much bigger global economy because of it.

That is, as long as no major world wars happen.
 
2022-03-14 2:32:57 PM  
At least that's their excuse for this lockdown. With everyone home, they can sweep up dissidents and make them disappear under a cloak of medical reasons.
 
2022-03-14 6:21:29 PM  
This is a bigger deal than you might think at first. First, this is a big economic hub for China. The Chinese stock market is taking a dive today because of this shutdown, and because of China's possibly getting involved in the war on the Russian side which would result in at least some sanctions. Combined with the threat of more COVID shutdowns in China and you have a lot of pressure on the Chinese markets that might result in some exciting times especially if more Evergrandes go down.
 
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