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China’s port delays and supply chain disruptions threaten growth: analysts

Supply chain disruptions could threaten China’s growth prospects, according to senior global strategy analysts at investment managers.

But even if growth slowed in the second half of this year, Cartica Management’s Julia Hermann said this year’s “it doesn’t matter to me about the trajectory of the country.”

She added that China remains a “beating country” in terms of economic growth this year. Last year, China was the only major economy to record growth.

China’s gross domestic product increased by 18.3% in the first quarter of 2021 Compared to the same period a year ago. This was partly due to the low base in the first quarter of last year as Covid-19 took root and the blockade slowed business activity.

Hermann pointed out that China’s economy is expected to grow by about 8% in 2021, but acknowledged that the risks remain.

“I think the threat to that growth outlook could be on the trade side,” she told CNBC. “Street Signs Asia” on Wednesday. “Obviously … we’ve seen some major port capacity constraints that result from these common supply chain bottlenecks.”

Due to the recent outbreak of Covid-19 in Guangdong, China Delays in transportation at major ports on the mainland and spikes in transportation costs.

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Such risks are small in nature, and China’s policy best responds to top-down shocks, Hermann added.

Shipping delays are a risk, but it’s still unclear if the turmoil could be exacerbated, she said.

“We are really monitoring and waiting for all of these supply constraints,” she said, and given the economic downturn that the world experienced in 2020, a serious “supply disparity” makes sense. He said it was.

“It’s about how temporary this will be (and) how much it will affect prices,” Hermann said. Delayed supply disruptions could drive costs for both businesses and customers. Mentioned concerns that there are.

Digital yuan vs. digital dollar

Apart from this, she said Beijing has fewer hurdles in developing digital currencies than Washington.

China gave Millions of digital sources are separated during trials in many cities..

Meanwhile, the United States continues to seek moves towards the issuance of central banks’ digital currencies.The· The Federal Reserve Board of Governors announced that it will publish a research treatise in May. About this summer’s theme.

The trade-off between privacy and the ability to track malicious individuals was a major theme at a hearing at the US Parliamentary Financial Services Commission on the digital dollar, Hermann said.

“China has explicitly chosen which side of the equation, they will fall,” she said. “(They) will obviously sacrifice privacy, but that’s a big problem in the United States,” he said.

I think the story that digital yuan is a threat to the US dollar is a bit exaggerated, based on what we can reasonably expect at this point.

Julia Hermann

Analyst, Cartica Management

In addition, she said the United States still needs legislative approval of the digital dollar.

“I think China has fewer obstacles to developing digital currencies than the United States,” Hermann said.

Still, that doesn’t necessarily mean that digital yuan undermines its position as the US dollar and the world’s reserve currency.

“At this stage, it’s still in its infancy,” she said. “I think the story of digital yuan as a threat to the US dollar is a bit exaggerated, based on what we can reasonably expect at this point.”

China’s port delays and supply chain disruptions threaten growth: analysts

Source link China’s port delays and supply chain disruptions threaten growth: analysts

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