China’s new COVID-19 lockdowns are just the latest threat to the global economy
China’s new COVID-19 lockdowns are just the latest threat to the global economy

China’s new COVID-19 lockdowns are just the latest threat to the global economy

Russia’s war in Ukraine is raging the global economy, while political decision – makers are rushing to bring high inflation under control. But China’s response to its worst outbreak of COVID-19 in two years is a reminder that the conflict is not the only risk to recovery. What’s Happening: The world’s second-largest economy is pushing forward with its ‘zero-COVID’ strategy, though many other governments are deciding it’s time to learn to live with the virus. Shenzhen, a major tech hub, has entered a week-long lockdown after the city registered 66 positive cases on Saturday. All companies except those that are considered significant, have suspended operations or have implemented work from home. Shanghai, China’s largest business center, has also imposed strict measures following an increase in cases, closure of schools and cinemas and restrictions on travel to the city. Who gets hit: Foxconn, one of Apple’s biggest suppliers, has suspended its activities in Shenzhen, where it has two large campuses. It said Monday that the date of resumption of factory work will be “advised by the local government.” The Taiwanese company said it had moved production to other locations to “minimize the potential impact” of the outage, but did not specify which locations would take on additional work. the leap in coronavirus infections will wave around the world. The country registered 2,125 local cases in 58 cities on Sunday. Shutdowns in China could further increase container freight costs, which remain extremely high, and distort global supply chains that are still trying to sort through pandemic-related delays. “If there is a case found in the Yantian port, then there could be a suspension of the port for at least two weeks,” economists at ING told customers on Monday. “It will then affect the export and import of electronic parts and goods.” It can make inflation even worse. Expenditure in China, a key driver of the country’s growth, could also be affected by a new wave of COVID restrictions. “This is certainly the worst virus situation in China since the Wuhan shutdown and threatens growth prospects as domestic consumption picks up a hit, “Commerzbank economists Hao Zhou and Bernd Weidensteiner said on Monday. Remember: China’s growth target of around 5.5% this year was already the lowest in three decades. The country’s economy grew by 8.1% in 2021, but the pace of growth fell sharply in the last months of the year. War has brought the world to the brink of a food crisis Svein Tore Holsether says the world is heading for a food crisis that could affect millions of Record high natural gas prices have forced the company he runs, fertilizer producer Yara International, to limit its production of ammonia and urea in Europe to 45% of capacity. With fewer of these two essential agricultural ingredients, he expects contagious effects on global food supplies. “Than two weeks after Russia invaded Ukraine, the prices of key agricultural products produced in the region have risen. The biggest problem is wheat, a pantry. Supplies from Russia and Ukraine, which together account for almost 30% of global wheat trade, are now at risk. Global wheat prices hit a record high last week. There is more: Another major problem is access to fertilizers. It is crucial for farmers to reach their production targets for crops, it has never been more expensive as exports from Russia stall.production in Europe has also fallen thanks to the rising price of natural gas, an important ingredient in nitrogen-based fertilizers such as urea.The situation is ringing alarm bells for global food experts. Agriculture ministers from the G7 countries met on Friday to discuss the impending fallout. “Any further increase “in food price levels and volatility in international markets can threaten food security and nutrition globally, especially among the most vulnerable living in low food security environments,” they said in a statement after the meeting. Russia and Ukraine serve as the breadbasket for countries in the Middle East and North Africa that are dependent on imports. The US and Europe will also feel the pain, as the rise in prices of key agricultural products will affect food-producing companies in all markets. Uber’s fuel surcharge can only be the beginning. Everyone feels pain at the pump – even Uber. The carpooling service has announced that it is rolling out a fuel surcharge to help drivers compensate for the burden of higher gas prices for at least the next two months, reports CNN Business’ Ramishah Maruf. As of Wednesday, users will pay $ 0.45 extra or $ 0.55 per person. travel and an additional $ 0.35 or $ 0.45 for Uber Eats, depending on the location. Uber said all the money from the surcharges will go to drivers. “We know prices have risen throughout the economy, so we have done our best to help drivers and couriers without putting too much extra burden on consumers,” Liza said. Winship, head of driver operations for the United States and Canada. Uber said switching to electric vehicles would be the best way to avoid skyrocketing gas prices in the long run. It provides up to $ 4,000 annually to drivers who use electric cars and have partnered with Hertz to make as many as 50,000 Teslas available for drivers to rent by 2023. In the meantime, however, sky-high fuel costs are likely to bite. And Uber will not be alone in deciding that it should pass on some of the costs to its customers. On the radar: Passengers can also start seeing surcharges on flights, as fuel accounts for between 20% and 30% of the airline’s operating costs.

Russia’s war in Ukraine is raging the global economy, while political decision – makers are rushing to bring high inflation under control. But China’s response to its worst outbreak of COVID-19 in two years is a reminder that the conflict is not the only risk to recovery.

What’s Happening: The world’s second-largest economy is pushing forward with its ‘zero-COVID’ strategy, though many other governments are deciding it’s time to learn to live with the virus.

Shenzhen, a major tech hub, has entered a week-long lockdown after the city registered 66 positive cases on Saturday. All companies except those that are considered significant, have suspended operations or have implemented work from home. Shanghai, China’s largest business center, has also imposed strict measures following an increase in cases, closure of schools and cinemas and restrictions on travel to the city.

Who gets hit: Foxconn, one of Apple’s biggest suppliers, has suspended its activities in Shenzhen, where it has two large campuses. It said Monday that the date of resumption of factory work will be “advised by the local government.”

The Taiwanese company said it had moved production to other locations to “minimize the potential impact” from the disruption, but did not specify which locations would take on extra work.

Uncertainty surrounding Foxconn’s production is a sign of how China’s response to the leap in coronavirus infections will wave around the world. The country registered 2,125 local cases Sunday in 58 cities.

Shutdowns in China could further increase container freight costs, which remain extremely high, and distort global supply chains that are still trying to sort through pandemic-related delays.

“If there is a case found in the Yantian port [in Shenzhen]then there could be a port suspension for at least two weeks, “economists at ING told customers on Monday.” It will then affect the export and import of electronic parts and goods. “

It can make inflation even worse. Expenditure in China, a key driver of the country’s growth, could also be affected by a new wave of COVID restrictions.

“This is certainly the worst virus situation in China since the Wuhan shutdown and threatens growth prospects as domestic consumption will get another hit,” Commerzbank economists Hao Zhou and Bernd Weidensteiner said on Monday.

Remember: China’s growth target of around 5.5% this year was already the lowest in three decades. The country’s economy grew 8.1% in 2021, but the growth rate fell sharply in the last months of the year.

War has brought the world to the brink of a food crisis

Svein Tore Holsether says the world is heading for a food crisis that could affect millions of people.

Record high natural gas prices have forced the company he runs, fertilizer producer Yara International, to limit its production of ammonia and urea in Europe to 45% of capacity. With fewer of these two important agricultural ingredients, he expects contagious effects for global food supplies.

“It’s not whether we’re going to have a food crisis. It’s how big the crisis is going to be,” Holsether told me.

Step back: More than two weeks after Russia invaded Ukraine, the prices of important agricultural products produced in the region have risen. The biggest problem is wheat, a pantry. Supplies from Russia and Ukraine, which together account for almost 30% of global wheat trade, are now at risk. Global wheat prices hit the highest record last week.

There is more: Another major problem is access to fertilizer. It is crucial for farmers to reach their production targets for crops, it has never been more expensive as exports from Russia stall. Production in Europe has also fallen thanks to the rising price of natural gas, an important ingredient in nitrogen-based fertilizers such as urea.

The situation is ringing alarm bells for global food experts. Agriculture ministers from the G7 countries met on Friday to discuss the looming fallout.

“Any further increase in food price levels and volatility in international markets could threaten food security and nutrition globally, especially among the most vulnerable living in low food security environments,” they said in a statement after the meeting.

Russia and Ukraine act as bread baskets for countries in the Middle East and North Africa that are dependent on imports. The United States and Europe will also feel the pain, as rising prices for key agricultural products will affect food-producing companies in all markets.

Uber’s fuel surcharge can only be the beginning

Everyone feels pain at the pump – even Uber.

The carpooling service has announced that it is roll-out of a fuel surcharge to help its drivers offset the burden of higher gas prices for at least the next two months, reports CNN Business’ Ramishah Maruf.

As of Wednesday, users will pay $ 0.45 or $ 0.55 extra per person. travel and an additional $ 0.35 or $ 0.45 for Uber Eats, depending on the location. Uber said all the money from the supplements will go to drivers.

“We know prices have risen throughout the economy, so we’ve done our best to help drivers and couriers without putting too much extra burden on consumers,” said Liza Winship, head of driver operations in the United States and Canada.

Uber said switching to electric vehicles would be the best way to avoid skyrocketing gas prices in the long run. It provides up to $ 4,000 annually to drivers who use electric cars and have partnered with Hertz to make as many as 50,000 Teslas available for drivers to rent by 2023.

In the meantime, the sky-high fuel costs are likely to bite. And Uber will not be alone in deciding that it should pass on some of the costs to its customers.

On the radar: Passengers can also start seeing surcharges on flights, as fuel accounts for between 20% and 30% of the airline’s operating costs.

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