Secret Doors.

When it rains, it pours.

1. Parents have organized petitions, imploring the government not to separate children infected with the coronavirus from their families. Patients have demanded to speak with higher-ups about shoddy conditions at isolation facilities. Residents have confronted officials over containment policies that they see as unfair or inhumane, then shared recordings of those arguments online.

As the coronavirus races through Shanghai, in the city’s worst outbreak since the pandemic began, the authorities have deployed their usual hard-nosed playbook to try and stamp out transmission, no matter the cost. What has been different is the response: an outpouring of public dissatisfaction rarely seen in China since the chaotic early days of the pandemic, in Wuhan.

The crisis in Shanghai is shaping up to be more than just a public health challenge. It is also a political test of the zero tolerance approach at large, on which the Communist Party has staked its legitimacy. (Source: nytimes.com)

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2. A spate of lockdowns in Shanghai and other Chinese cities is piling severe pressure on transport and logistics across the country, exacerbating the economic fallout of the government’s commitment to its zero-Covid policies as cases continue to soar to record levels.

The disruption has affected the trucking industry in particular, which plays a critical role in transporting goods between cities and to some of the world’s biggest ports but is now subject to severe restrictions on drivers and deliveries to locations with positive cases.

“Trucking is the main issue we have,” said Mads Ravn, executive vice-president and global head of air freight procurement at DSV, one of the world’s largest freight brokerages. He added that booking truck services was close to impossible and that flight activity into Shanghai Pudong airport was just 3 per cent of its rate last month, with air cargo shipments limited to essential goods such as medicine.

“Basically everything else is not moving but is being diverted away from Shanghai to other parts of China. It’s affecting every commodity you can think of,” he said. “It will have a global effect on almost every trade.” (Source: ft.com)

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3. Eurointelligence.

It is the inherent assumption in all modern economic models, about which economists often don't lose a lot of sleep, that shocks are independent of each other and normally distributed. Translated in ordinary language this means that their average expected impact is zero, and that they don't impact each other. The very opposite is the case with the global supply shocks that are going on right now. It's actually worse than the British saying when it rains, it pours. Tomorrow, it will pour too.

This is essentially the story of our global supply chain shocks. Germany, and Europe by extension, is heading into its next supply chain crisis, caused by the combination of the war and the Chinese lockdown of Shanghai. The reason why these shocks are correlated is the fact that we have made ourselves dependent on Russia for gas, and on China for intermediate supplies. When the history of globalization is written, it will come to be seen as an unsustainable ecosystem that is now collapsing in on itself. (Source: eurointelligence.com)