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Hidden appearances in China spark fears of disruption to trade

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A Covid-19 outbreak in southern China slows down some activities in the country’s largest ports, and further disruptions in international trade raise the risk of rising export prices.

Since the end of May, more than 100 new cases have been reported in Guangdong province, one of China’s most important manufacturing sites, and has led to drastic measures against the government.

Processing at the Yantian container terminal in Shenzhen, which had been suspended for almost a week last week after workers gave positive results, has come down. There has also been a significant decline in the number of vessels docking as authorities enforce coronavirus prevention measures.

The slowdown in the terminal, which has worsened congestion in nearby Chinese ports of Nansha and Shekou, reveals the vulnerability of shipments around the world in appearances in the country, as new infections have remained low compared to other major economies over the past year.

“It’s the size of the terminal that matters,” said Lars Mikael Jensen of Maersk International Shipping Company. “This is a terminal that is active in all markets, one of the largest in the world, and it has some effect.”

It also puts pressure on China’s trade performance, which has risen under the pandemic by increasing demand for products related to blockchain abroad, such as electronics and home appliances. Chinese export growth has contributed rapid recovery Since the initial economic success of Covid-19.

According to official data for this week, Chinese exports rose 27.9 percent year-on-year in May compared to last year’s low base. But based on a survey of economists at Bloomberg, they lost 32.1 percent growth in expectations, and analysts suggested that the break could weaken future performance.

“We expect the June trade and production data to have an impact,” said Iris Pan, ING’s top Chinese economist. “This could generally raise the prices of electronic products and affect the prices of Chinese exports and ultimately the prices of US and European imports.”

Global shipping has experienced several tensions over the past year, among others shortage of containers and problems with crews who cannot land in ports. In China, they have some manufacturers they boarded the train to transport their goods to Europe instead, volumes remain a small part of the shipping trade.

“Other Chinese ports will also be more cautious,” said Zhiwei Zhang, chief economist at Pinpoint Asset Management. “Along with the pandemic in the economies of India and Southeast Asia, the shortage of shipping, the increase in freight and shipping costs, this rise in Covid cases in Guangdong could put more inflationary pressure on other countries.”

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“I think this is just the beginning. We may not be as lucky as last year, ”said Penny Cheng, Shenzhen’s transportation agent, who said the delivery schedule has been delayed at the city port.

Local authorities are very sensitive to the rise in cases, as the central government has severely punished officials in the newly created Covid-19 province. All residents of Guangzhou have had to take the test, and cities across the province have been banned if people refuse.

Additional report by Qianer Liu in Shenzhen

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