It is no doubt at this point that China plays huge role in the global economy, and its internal issues send a ripple throughout the economies of other countries as well. Located at an epicenter of trade, and a hub for supply chains, the global economy may yet again face another crunch.
But a power crunch curbing production in the factory to the world — that’s clearly going to send some shock waves through the global economy. Many companies located within the US have already been struggling due to so much of their manufacturing being present within China-- inclusive of small and big companies such as Nike, Apple and Tesla too. This may also indicate slower growth in China too.
After the pandemic, the world has already faced a huge low and hardships within supply chains. These factors suggest that companies should begin diversifying their supply chains, perhaps bring them more local/domestic, as to avoid such problems. It will be interesting to see what happens from here.
1 comment:
I've also been following the Evergrande failure. Yes, as you've mentioned, it will be devastating for the world if this situation is not handled properly, especially if China doesn't let the world know exactly what's going on to help other countries prepare for the worst, rather than cover it up with self-appraising fake stories. It is always these companies that are given too much freedom to grow too much that always get the world to a standstill, but still, nations haven't learned from the past and made policies better. And when things like these happen, they just turn a blind eye or panic. Governments also should be held more accountable for their bureaucratic actions.
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