Many countries in the world are trapped in a supply dilemma

Source: China Youth Daily

Have you recently gone to the grocery store and found some of the shelves empty? If so, you aren’t alone."USA Today" recently reported on the recent shortage of goods in many parts of the United States. The Christmas and year-end shopping season is just around the corner, but with the international production supply chain still reeling from the COVID-19 pandemic, many Americans may not be able to get their usual gifts."USA Today" recently reported on the recent shortage of goods in many parts of the United States. The Christmas and year-end shopping season is just around the corner, but with the international production supply chain still reeling from the COVID-19 pandemic, many Americans may not be able to get their usual gifts.

This "year-end" situation does not only appear in the United States. In Europe, many supermarkets, commodity stores and building material stores in Britain, Germany and other countries have empty shelves. In Asia, Japan is experiencing a general rise in the prices of food, tobacco products and services, which may break the situation of deflation over the years; Because most of the frozen French fries used by Korean fast food chains are imported from the United States, many stores are in a state of long-term shortage or shortage; Many factories in Vietnam, Malaysia and Thailand have stopped production, and products such as apple phones and Nike shoes sent from Southeast Asia to the world face the risk of supply interruption. In addition, the problems in the supply chain superimposed the expected impact of the "cold winter", and the prices of crude oil complementary products such as global natural gas, coal and electricity soared beyond expectations, further driving the rise of oil prices.

Some argue that the world is facing a fragmented economic system, with supply chain shocks caused by COVID-19 and mistrust between countries pushing countries towards self-sufficiency. However, Ni Jianjun, deputy director of the Institute of World Economy at the China Institutes of Contemporary International Relations, pointed out in an interview with China Youth Daily and China Youth Net that the simultaneous difficulties in the end of multinational supply chains just proves that the global market is interconnected. No matter how hard some countries try to form closed, exclusive "coterie", the global market remains one. Any problems in the supply chain will affect the smooth flow of the whole logistics.

The root of supply chain crisis is the contradiction between supply and demand

Singapore's Lianhe Zaobao pointed out in an editorial that there are many and increasingly complex factors causing supply chain disruption. With the increasing interdependence of countries under globalization, they are facing different epidemic situations, which also increases the difficulty of resolving supply chain problems.

On the supply side, repeated outbreaks of COVID-19 and the ravages of mutated viruses have led to the closure of economic activities and the inability of workers to work due to disease or quarantine. Quarantine measures are costly and factories cannot operate. The impact of "black Swan" events such as the congestion of the Suez Canal in March has led to an increase in international freight prices and a large backlog of goods at ports. As of Oct. 18, about 200,000 containers were still sitting outside the port of Los Angeles, with 25% of the cargo sitting at the docks for 13 days or more and still not enough truck drivers to pick it up, said Serokakian Serocca, executive director of the port of Los Angeles.

On the consumer side, some countries are recovering from the pandemic and the Christmas shopping season is just around the corner. According to the Sun, shoppers have been flocking to shopping malls and retail outlets in Britain as they start buying gifts a month or two earlier than usual. According to the survey data of statista, an international well-known data analysis company, the policies of isolation and home office implemented during the epidemic have greatly stimulated the consumption of electronic products. However, due to the global chip shortage and supply chain interruption, many products, including mobile phones, cars, home appliances and personal computers, are still in shortage.

The contradiction between supply and demand has led to the rise of prices and the acceleration of inflation in many countries. According to the data released by the U.S. Department of labor on October 13, the U.S. consumer price index rose 0.4% in September, higher than the expected 0.3%. Compared with the same period last year, the index rose by 5.4%, reaching the highest level since January 1991.

The contradiction between supply and demand leads to rising prices and accelerated inflation in many countries. The U.S. Consumer price index rose 0.4 percent in September, beating expectations for a 0.3 percent rise, the Labor Department said Oct. 13. Compared with the same period last year, the index rose 5.4 percent to its highest level since January 1991.

Moody's, the international credit rating agency, said, "Delayed deliveries will choke production around the world, raising costs and prices and making global economic growth less robust." On Oct 12, the International Monetary Fund (IMF) lowered its 2021 global economic growth forecast by 0.1 percentage point from three months ago to 5.9 percent in its latest World Economic Outlook, maintaining its forecast of 4.9 percent growth in 2022. As Gita Gopinath, IMF chief economist, points out, the economic outlook for low-income countries has darkened considerably as the pandemic worsens. Economic conditions in advanced economies have also been difficult recently because of supply chain disruptions.

"Supply dilemma" is difficult to solve in the short term

In jianjun Ni's view, the outbreak and spread of the supply chain crisis shows that traditional developed countries' production and supply have put too much emphasis on efficiency and ignored long-term resilience, and COVID-19 has rapidly exposed the weak links in supply chains. He judged that in the short term, high demand, labor shortage, transportation delays, sky-high freight and a series of problems are not easy to deal with, the contradiction between rapidly recovering consumer demand and backward supply, it is difficult to completely solve in the short term, the medium and long term situation remains to be further observed.