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Fresh Covid-19 Outbreaks in Asia Disrupt Global Shipping, Chip Supply Chain

A fresh wave of Covid-19 outbreak clusters in Asia has created bottlenecks in the supply chain, which threaten to increase prices and impact post-pandemic recovery across the globe. Vaccination campaigns are still in the early stages throughout much of the region, resulting in increased risks of new outbreaks. One outbreak has occurred at one of the world’s busiest ports in southern China, leading to global shipping delays. Another at a key point in the semiconductor supply chain in Taiwan has worsened a global chip shortage and impacted auto and technology production.

The new outbreaks at key facilities have led to inflation concerns after China and the US recorded their biggest annual increases in factory-gate and consumer prices last week in more than a decade. If problems worsen or continue, experts worry that there could be adverse effects on global growth. The aforementioned low vaccination rates keep in place social distancing rules and travel bans in Asia while the West begins to open back up and increase economic activity. The lockdowns disrupt manufacturing and suppress consumer spending in Asia.

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