Promotional Products

China Suppliers: Production Risks With CNY and COVID Surge

December 2022 – China has been experiencing a significant rise in cases since they lightened the stringent regulations following protests last month. Consequently, there has been a rapid contagion of infections – the daily count of cases has reached new heights in the initial two weeks of this month.

It seems that all of China is getting the full effect of Covid. Factories are reporting extensive infections. When staff is ill, they go home. Given it is close to Chinese New Year, we could see many factories closing early for CNY since workers will not return to work.

This also means that there are higher risks around production quality in the coming weeks, so ODM is stepping up QC visits to factories.

Read more about the Chinese New Year factory shutdowns here:

How Do the Lockdowns Affect the Supply Chain?

From a production standpoint, the recent coronavirus outbreak can have a massive impact on the supply chain not just in the region but globally.

Both manufacturing and services activity plunged to their worst levels since February 2020, when the nation imposed a range of restrictions amid its initial coronavirus outbreak centred in Wuhan, according to purchasing managers’ surveys. The offshore yuan weakened in the wake of the data.

How Does the Pandemic Affect the Economy?

The Omicron outbreak is severely disrupting the lives and businesses of many people in China. With most cities locked down, people are advised to stay at home and not leave unless for acceptable circumstances.

The latest lockdowns in China’s key cities undeniably caused further disruption to the country’s supply chains, and the global economy, in what has already been a tumultuous year.

As the coronavirus surge started to spike, many Chinese suppliers closed their factories, causing a ripple effect across the promotional products industry.

Orders which are manufactured in China will be shipped late and there is a lot of uncertainty from factories. When will factory workers be able to commute back and pick up tools again? Let us know how this affects you and we will update this article with the news.

Also Read:

The General Administration of Customs of the People’s Republic of China (GACC) recently ordered a 100-day crackdown on concealment and false declaration of dangerous goods. Read this article to learn more:

News from China Suppliers

August 2022

China’s export growth unexpectedly picked up speed in July, giving an encouraging boost to the economy as its struggles to recover from a sharp drop in exports due to the Covid-induced slump. Volume at ports is increasing, and delays are starting to dip.  Imports remain stagnant, however.

July 2022

To ensure the safety and health of people, the New Coronavirus Pneumonia Epidemic Prevention and Control Headquarters in Xiangzhou District, Zhuhai City imposed a new lockdown in Jida and Fengshan starting July 12th.

The ODM office in Zhuhai was closed for the 3 days due to this epidemic prevention and continues to work from home. Meanwhile, other cities in South China will be closed for 7 days lockdown.

May 2022

Tightening COVID-19 lockdowns is expected to further hurt the Chinese economy, aggravate the global supply chain and add to inflation in the months to come.

Since March, mainland China has faced its worst covid outbreak since early 2020. The country used the same zero-covid strategy of swift lockdowns that had helped it return to growth before.

Manufacturing areas from the northern province of Jilin to the southern city of Shenzhen were among those initially forced to lock down.

However, the length of restrictions has varied greatly by region. Shanghai, China’s largest city, essentially remained locked down for all of April.

The capital city of Beijing began tightening travel and business restrictions toward the end of the month to control the spike in Covid cases.

April 2022

Shanghai, China’s largest city and one of the world’s leading financial centres, will remain under lockdown as it reviews the test results of its 26 million residents for COVID-19, authorities said on Monday.

The city began a two-stage lockdown on 28th March initially in Shanghai’s eastern districts and later expanded to confine practically all residents to their homes, reporting 8,581 asymptomatic COVID-19 cases and 425 symptomatic COVID cases for April 3. Residents are also asked to self-test on Sunday, 4th April.

The city will continue to implement seal and control management and strictly implement the ‘staying at home’ policy, except for those who need medical treatment.

The military and thousands of healthcare workers are sent to Shanghai to help carry out COVID-19 tests for all of its 26 million residents on Monday, in one of the country’s biggest-ever public health responses.

Along with the citywide lockdown, the city has also converted multiple hospitals, gymnasiums, apartment blocks and other venues into central quarantine sites, including the Shanghai New International Expo Center which can hold 15,000 patients at full capacity.

March 2022

Shenzhen, a major tech sector and electronics manufacturing hub just across from Hong Kong, will be put under a citywide lockdown starting Monday, March 14 as the local government announced after it reported 66 new coronavirus cases.

Shenzhen’s port is one of the world’s largest. Last year, an outbreak in Shenzhen, which led to a lockdown in the city, has disrupted the global supply chains and caused a steep spike in shipping rates that drove up prices for imported goods in the United States and elsewhere.

February 2022

China’s manufacturing activity expanded unexpectedly in February, pointing to some resiliency in the world’s second-largest economy even as downward pressure builds and Russia’s invasion of Ukraine heightens global uncertainty.

New orders grew for the first time since August last year, as demand improved following the Lunar New Year holidays.

January 2022

China welcomes 2022 with the worst COVID week since taming virus. The surge has been driven mostly by an outbreak in the northwestern industrial and tech hub of Xi’an, a city of 13 million.

December 2021

China has stuck to a “zero-COVID” strategy of tight border restrictions, lengthy quarantines and targeted lockdowns as Beijing prepares to welcome thousands of visitors for February’s Winter Olympics.

On the other hand, Xi’an – 13 million residents are at the centre of a flare-up that has pushed nationwide daily infections to their highest numbers since March 2020.

November 2021

China’s factory activity unexpectedly picked up in November, growing for the first time in three months as the crippling surge in raw material prices and power rationing eased, taking some pressure off the manufacturing sector.

October 2021

China’s manufacturing activity contracted more than expected in October to shrink for a second month, hurt by persistently high raw material prices and softer domestic demand, pointing to more economic disquiet in the final quarter of 2021.

September 2021

Factories in China are struggling at a time when the world’s second-largest economy has to contend with yet another concern: a growing power supply crunch.

The worsening power crunch has triggered blackouts for households and forced factories to cut production — a threat to the country’s vast economy that could place even more strain on global supply chains.

Read:

Power Crisis in China: How to Handle the Business Impacts of Stagnation?

Transforming the economic model, ensuring the harmony between economic development and environmental protection, and taking appropriate revolutionary steps are the […]

August 2021

China’s businesses and the broader economy came under increasing pressure in August as manufacturing activity expanded at a slower pace while the services sector slumped into contraction, raising the likelihood of more near-term policy support to boost growth.

The world’s second-biggest economy staged an impressive recovery from a coronavirus-battered slump, but momentum has weakened recently due to domestic COVID-19 outbreaks, high raw material prices, slowing exports, tighter measures to tame hot property prices and a campaign to reduce carbon emissions.

July 2021

China’s factory activity expanded at a slower pace in July due to higher raw material costs, equipment maintenance and extreme weather, adding to concerns of a slowdown in the world’s second-biggest economy.

Factory output and retail sales growth slowed sharply and missed expectations in July, as new COVID-19 outbreaks and floods disrupted business operations, adding to signs the economic recovery is losing momentum.

June 2021

Growth in China’s manufacturing activity in June dipped to a four-month low on higher raw material costs, a shortage of semiconductors and a COVID-19 outbreak in the major export province of Guangdong, amid wider supply chain disruptions in Asia.

May 2021

China’s factory activity growth slowed slightly in May as raw materials costs grew at their fastest pace in over a decade, weighing on the output of small and export-oriented firms.

April 2021

China’s factory activity in April expanded at the fastest pace in four months on stronger demand, but concerns over surging raw materials and input costs clouded the outlook.

March 2021

China’s manufacturing activity expanded at the quickest pace in 3 months in March as factories cranked up production after a brief lull during the Lunar New Year holidays, with improving global demand adding further momentum to a solid economic recovery.

February 2021

Manufacturers received a boost from China’s relatively early reopening after the coronavirus hit. But sales have been hurt by unease among Chinese consumers about the economic outlook and renewed disease outbreaks abroad that have prompted governments to reimpose business and travel curbs.

January 2021

In January, mainland China reported more than 2,000 local cases of the coronavirus. While the number was small compared with other countries, authorities were concerned about transmission risks during the Lunar New Year travel rush – the world’s biggest annual human migration spanning 40 days from January to February.

During the month, several large cities were locked down with tens of millions tested for COVID-19, interrupting factory activity and weighing on the services sector, including logistics and transportation.

Chinese authorities in Guangdong province have cancelled flights and locked down communities in response to what is believed to be the first community outbreak of the Indian variant in China.
Here Are Some Tips to Protect Yourself from the Deadly Coronavirus:
  • Avoid close contact with people who are sick.
  • Avoid touching your eyes, nose and mouth.
  • Stay home if you’re feeling ill.
  • Cover your mouth when you cough and sneeze with a tissue, then throw the tissue right away.
  • Wash your hands often with soap and water for at least 20 seconds or use an alcohol-based hand sanitiser that contains at least 60% alcohol (both are effective).
  • Clean and disinfect frequently used surfaces like doorknobs, light switches and phones daily.

What is the Role of ODM?

This latest news from mainland China will definitely create an impact for all business industries and manufacturers. The general health of people is being prioritized over production and business.

What does this mean?

It means that you should be planning ahead, and not waiting until the last minute. If you are going to need promotional products at some point in the next few months, it is time to start planning now. Many companies will have major disruptions in their supply chain, so having contingency plans in place is more important than ever.

We are able to work with clients and factories remotely, by phone and email. This makes it possible for suppliers to keep working and getting orders out the door, even though they may be in quarantine or generally practising social distancing. Suppliers are still allowed to ship goods from China, but it might take longer than usual due to restrictions on movement.

If your company needs help with sourcing promo products during this challenging time, we can help! We have helped many of our clients with contingency plans for shortage situations like this, so we can do it again for you!

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