China is a manufacturing powerhouse in the modern world. According to a 2019 study, China accounts for over a quarter – 28.7 percent – of global manufacturing output. Putting China well ahead of the USA, which accounts for 16 percent of the global manufacturing output. China became the world’s dominant manufacturer in 2010 and shows no sign of slowing down.
Recent years have seen the world face a global shipping crisis. Delivery times on Chinese manufactured items seem to be getting longer, items are out of stock and companies are having to halt production. As part of Chinese Language Day, we focus this blog on a more in depth look at China and its current struggles?
Covid-19
Undoubtedly, the biggest and most talked about reason for China’s difficulties is the Covid-19 pandemic. The pandemic is believed to have started in China, in the city of Wuhan, with the first cases being reported on the 31st December 2019. Consequently Wuhan went into full lockdown on the 23rd January 2020. Since then, various cities and regions in China have been in and out of lockdown, with some being initiated as recently as March 2022. China has taken on a zero covid policy, which has led to multiple sporadic lockdowns, some lasting days some lasting months.
The pandemic and these lockdowns have proved a challenge for their manufacturing workforce. With staff off work and workplaces temporarily closing due to the surge in covid-19 numbers, the Chinese market has taken a hit. Earlier in March, the Shanghai Composite lost 5% and the Hang Seng index fell more than 6%, where several Chinese technology giants are listed.
In the recent lockdown of Shenzhen, manufacturing giants such as Toyota, Volkswagen and Apple supplier Foxconn were among the biggest firms affected. They were all forced to suspend operations, which furthered disruption to an already backlogged supply chain.
Chip shortage
Off the back of Covid and China’s zero covid policy sending cities into lockdowns, the world is currently enduring a shortage of electronic chips.
We rely on technology so much in the modern world. Millions of products we use every day such as cars, smartphones and kitchen appliances all rely on electronic chips. The reduction in supply makes it impossible to meet industry demand. As a result of this shortage, many popular products are in short supply or have long waiting lists. An example of this is the PS5 games console, since its release over a year ago, it is still nearby impossible to purchase due to the ongoing electronic chip shortage. Ford have had to temporarily halt production in two of their European factories, with workers at the German plants in Saarlouis and Cologne being told to stay home temporarily as the factories shut their doors awaiting delivery of additional chips. Smartphone producers are also suffering from the shortage, with industry giants Apple warning that the scarcity of chips could affect iPhone sales.
Brexit
As well as global struggles in producing products, the UK is also struggling to import products. Towards the backend of 2021, the UK suffered a shortage of HGV drivers, which led to products not being imported into the country. The fuel crisis in the UK sent drivers up and down the country into meltdown. Queueing 45 minutes to fill your tank up, only being able to spend £30 maximum, it was a crazy few weeks for the UK public. This shortage, mixed with Russia’s invasion of Ukraine, has sent petrol prices soaring, with the UK seeing petrol at nearly £1.67 a litre and diesel at £1.79. In May 2020, in the height of lockdown, petrol prices were as low as £1.07 for petrol and £1.12 for diesel.
Despite all this doom and gloom about manufacturing hold ups and shortages around the world, we here at ETC are ready to keep on going. We operate on a global scale, headquartered from our offices in Lewes, East Sussex. Our innovative electronic burner controls are ready to be shipped out and can help you cut emissions and save money in doing so.
If you would like to learn more about how Energy Technology & Control products can help your company succeed, click here.