[ad_1]
Warning of preparation
Economist Alexander Izgorodin told Delfi that in autumn and winter we could see unpleasant inflationary surprises caused by the spread of the COVID virus in China and the strict measures taken by the Chinese authorities in the fight against the virus.
“The nuance is that the delta strain of COVID has spread to about half of China’s provinces, and the Chinese government itself is enforcing the so-called ‘zero COVID policy.’ This means that new COVID outbreaks are being responded to through strict quarantine measures.
It also affected China’s third largest container port in the world, Ningbo-Zhoushan.
After a worker was exposed to the COVID virus, port activities were severely restricted for about a week. The restriction at this strategically important port has already affected global supply chains: delays in the supply of some goods and components from China have increased the cost of shipping containers from China, ”he said, comparing the International Container Index from Shanghai-Rotterdam with January 2021.. 2.3 thousand USD, but it had already risen to 13.6 thousand in August. AMERICAN DOLLAR.
“Recently, the growth of this index has been affected by the limited activities of the Ningbo-Zhoushan port.
“If China continues to enforce a strict policy on new COVID stacks, the cost of transporting containers from China to Europe could rise further,” the economist warned.
Aleksandras Izgorodinas
It also argued that the disruption of supply chains could lead to delays or disruptions in the supply of some goods and components from China, which could also increase the price of goods and components made in China.
According to him, such import disturbances from China would be very significant for Lithuanian companies. In terms of direct impact, Lithuanian companies that buy products from China may face an increase in the prices of these products or their transportation. The same threat awaits companies that buy goods from China through intermediaries.
“Interrupted imports from China or more expensive transportation of products from China can affect practically every segment of Lithuanian industry: from the food and beverage industry to the metal engineering and processing industries.
So my advice to businesses and consumers: be prepared for an unstable supply of goods and components from China in the fall and winter, as well as a possible rise in logistics prices.
If you know you will buy goods, raw materials or components from Asia in the fall, keep a close eye on the dynamics of the COVID virus in China, ”warned A. Izgorodin.
Major: indirect effects
INVL Asset Management economist Indrė Genytė-Pikčienė stated that the Lithuanian economy does not depend much on China, but assured that the spread of COVID in this country would still affect Lithuania.
“We import only 4% from China, which is quite a lot, and in terms of exports, the dependency is less than 1%, if we look at products of Lithuanian origin.”
That the spread of COVID would have a significant direct impact on us is probably not the case, but it is only natural that it contributes to the already confused picture of international trade, as we have an unenviable situation after the pandemic due to the soaring increase in products. basic. prices ”, he said, the impact on our country would be more indirect.
Indrė Genytė-Pikčienė
“The European Union (EU) is a trading partner of China in TOP1 in terms of imports and TOP3 in terms of exports. An open economy, so we would not avoid price increases,” he said.
However, according to the economist, currently the geopolitical background in terms of Lithuanian-Chinese relations is much sharper than the economic one.
“At the economic level, the threats that must now be seen due to political and geopolitical decisions do not have serious consequences for the Lithuanian economy, but the aggravated context is more political and here there are no questions and answers in the economic field,” she said.
You can win too
Sigismund Mauricas, an economist at Luminor Bank, said that for Lithuania, the breaking of the chains, if COVID spreads further in the world in autumn and winter, could also have a very positive effect, which could well be exploited in the medium term.
“For Lithuania as a whole, breaking supply chains could be beneficial, because if China decides to close its ports, at least temporarily, as has been done, breaking the chains will probably give our companies more work,” he said.
Sigismund Mauricas
It is true that some companies in our country would still face a lack of components, but, as he emphasized, Lithuania is in a better position than other EU countries.
“We have a relatively small dependence on China, so there is a possibility that we will get even more orders and as we are niche, more flexible, some companies have already taken advantage of those opportunities during the pandemic,” he added.
The economist did not rule out the possibility that a stagnation in supply could lead to an increase in the prices of some goods, but, as he said, they have already risen due to the recent imposition of tariffs on low-value goods.
“Looking ahead, I think there will be a lot of pressure to transport goods over such long distances, because it will not be in line with the vision of a green world, a green Europe. Maritime transport is one of the most polluting sectors ”, said the economist.
He believes that the epicenter of the industry will move to Europe over time.
It is strictly forbidden to use the information published by DELFI on other websites, in the media or elsewhere, or to distribute our material in any way without consent, and if consent has been obtained, it is necessary to indicate DELFI as the source .
[ad_2]
