China is in the midst of an explosion in COVID cases, which has implications for the whole world. Because of how the ongoing pandemic has and will continue to affect manufacturing we want to make sure you have the same information we do.
Here's what we know about COVID in China and what it means for all of us.
What we know
COVID never really left China. Not including the most recent surge in cases, 2022 saw three separate spikes which peaked in March, May, and October (World, 2023).
The most recent spike in China started in late August and lasted through September and the early part of November. On its worst day (Oct 6th), 56,487 cases were reported and there was an average daily death toll of 7 (Johns, 2023).
The current surge in cases started around December 15th. The death toll has been slowly rising since November, but there was a sharp increase from 35 deaths daily on Dec 17th to 75 deaths on Jan 4th (Johns, 2023).
While the current wave isn't seeing as many daily cases as the October spike (Johns, 2023), the estimated daily death toll is ten times what it was. This is at odds with the number of deaths being reported by the Chinese government.
When the government pulled back its Zero COVID policies it also stopped reporting daily infection and death statistics, opting instead to report monthly (Griffiths, 2022). The official information published by the government suggests there have been five deaths or fewer per day, but this is "inconsistent with the long queues seen at funeral homes and reports of deaths on social media (Yong, 2023)." The World Health Organization is now saying that China is severely under-reporting fatalities.
Hospitals in major cities are at capacity dealing with COVID cases (Yong, 2023).
The Zero COVID policies that were in place hindered manufacturing by forcing factories to close after a handful of reported coronavirus cases. The effect on manufacturing now is worse without the Zero COVID policy to curb infections. It's reported that without guidelines in place "workers out sick, others have also been staying home to avoid infection, or in some cases, working while infected (Magill, 2023)." The loss of the Zero COVID policy has resulted in increased infection and absence rates among workers and management, meaning that facilities are working well below capacity if at all.
There is little optimism that the situation will get better soon. January 21st is the start of the Chinese New Year, a holiday where millions of Chinese citizens travel home to be with family. The WHO is concerned that gatherings and travel during the month-long holiday could worsen an already bad situation (Yong, 2023).
Because of the current reduced output, "Some companies have had to prioritize or shift orders...many are also facing the issue of falling input orders, causing them to cut production ahead of Chinese New Year (Magill, 2023)."
What it means
The uncertainty around how the Chinese New Year will affect infection rates and the lack of concrete data makes it difficult to say how long this current surge will last.
The situation in China is uncertain and very serious—emphasized by the suppression of information. Moving forward, businesses will need to learn how to operate in COVID conditions again.
As consumers, we may have to get used to the new normal. On-demand retail like we're used to is going to start lagging again because of shortages and delays.
The good news is that we've done this before. In 2020 we were all blindsided by the Coronavirus pandemic. Two years later, we're still dealing with the fallout. What's different now is that we remember what it was like to live in a pandemic economy. We'll get through this.
We have some good people over there, and they're working hard in difficult circumstances, so we can get your products to you. We'll keep you posted as the situation develops.
Brown, D., Martinez, A., & Balash, W. (2023, January 10). A COVID surge in China could have global economic consequences. NPR Business. Retrieved January 13, 2023, from https://www.npr.org/2023/01/10/1148063053/a-covid-surge-in-china-could-have-global-economic-consequences
Farge, E. (2022, December 15). China's COVID spike not due to lifting of restrictions, WHO director says. Retrieved January 13, 2023, from https://www.reuters.com/world/china/chinas-covid-spike-not-due-lifting-restrictions-who-director-2022-12-14/
Griffiths, R. (2022, December 25). China has stopped publishing daily COVID data amid reports of a huge spike in cases. Retrieved January 13, 2023, from https://www.npr.org/2022/12/25/1145472905/china-stops-publishing-daily-covid-data
Johns Hopkins University (2023, January 10). China - COVID-19 overview. Johns Hopkins Coronavirus Resource Center. Retrieved January 13, 2023, from https://coronavirus.jhu.edu/region/china
Magill, K. (2023, January 13). China's spike in covid-19 cases strains factories. Supply Chain Dive. Retrieved January 13, 2023, from https://www.supplychaindive.com/news/china-covid-19-zero-policy-change-cases-spike-chinese-new-year-factories/640377/
World Health Organization (2023, January 13). China: WHO coronavirus disease (covid-19) dashboard with vaccination data. Retrieved January 13, 2023, from https://covid19.who.int/region/wpro/country/cn
Yong, N. (2023, January 13). Covid Cases in China touch 900 million - study. BBC News. Retrieved January 13, 2023, from https://www.bbc.com/news/world-asia-china-64258799