Tech Supply Chains Brace for Impact as China Returns to Rampant COVID

Supply chains can’t get a break. The summer heat has dissipated, but experts expect hundreds of millions of new cases of COVID to cause major disruptions again.

In the past, Beijing wouldn’t tolerate even small numbers of infections without strict lockdowns and movement restrictions. However, they have stopped ordering shutdowns and expect those catching COVID-19 to self-isolate, but cities will stay open even as infection spreads—no interim mitigation measures.

The Chinese Center for Disease Control and Prevention predicts that at least 80% to 90% of China’s population will eventually catch the virus. Mathematical models predict the first post-rule relaxation wave will peak, with the infection rate hitting 60% of the population. The U.S., which did not institute containment restrictions anywhere near as strict as China’s, reached 57.7% in February 2022.

China’s citizens have not rushed for vaccinations against the virus, even those that have may not have strong protection. Approximately 30% of its population aged 60 years or older did not receive vaccinations as of mid-November.

In the immediate term, there may be some recovery to the factory capacity, export, and pressure relief to the workers. But as infections spread, the situation may worsen.