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N757ST
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China isolation impact on the rest of the world

Thu Feb 06, 2020 11:59 am

If China is isolated for a significant amount of time, what is the effect on other countries? As in, what necessary goods do we import from them and how long can we go without them? If China is completely isolated for the next 8 months or so are there dangers since the world economy is so interconnected that other countries will lose the ability to function in certain aspects?
 
LabQuest
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Re: China isolation impact on the rest of the world

Thu Feb 06, 2020 10:52 pm

The shelves of terribly made toasters and hair dryers might become bare until we get those vital items back in stock once the sweatshops ramp back up.
 
EIBPI
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Re: China isolation impact on the rest of the world

Thu Feb 06, 2020 11:01 pm

Second hand goods may go back to having some value.
 
frmrCapCadet
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Re: China isolation impact on the rest of the world

Fri Feb 07, 2020 2:26 am

China is an important supplier of intermediate and final manufactured goods, from certain grades of high tech steel to iPhones. The world will be the poorer for it as the Chinese people suffer.
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Aaron747
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Re: China isolation impact on the rest of the world

Fri Feb 07, 2020 2:32 am

Many tourist sites will be at their most enjoyable in years without the tour groups and extra crowding.
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tommy1808
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Re: China isolation impact on the rest of the world

Fri Feb 07, 2020 6:29 am

frmrCapCadet wrote:
The world will be the poorer for it as the Chinese people suffer.


The PRC will be poorer as its citizens suffer....
What supply is swapped to an outside PRC source, and that is still possible for pretty much everything, won´t be coming back, as other places are cost competitive as well.
Supply side limitations only exists for few things these days...

best regards
Thomas
Well, there is prophecy in the bible after all: 2 Timothy 3:1-6
 
Zaf
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Re: China isolation impact on the rest of the world

Fri Feb 07, 2020 6:41 am

People will realize how much of everyday goods are made in China. You have no idea unless you work in supply chain or are a customs officer.
 
mrgrtt123
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Re: China isolation impact on the rest of the world

Fri Feb 07, 2020 6:56 am

I heard that the virus send Chinese stock crashing to 9%.
 
tommy1808
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Re: China isolation impact on the rest of the world

Fri Feb 07, 2020 7:31 am

Zaf wrote:
People will realize how much of everyday goods are made in China.


Actually, it is not that much anymore. Much everyday goods production have moved to Vietnam, Thailand, Philippines, for Textile lots to Peru, Turkey... and that isn´t done yet. Apple is the only non-PRC Smartphone maker left in the PRC for example, 5 years ago there where limited choices for a non-PRC made phone. The overwhelming majority of US and EU companies had been working on moving, or is moving out of China for anything but products for the chinese Market even before the Corona virus.... https://www.qima.com/qima-news/2019-q3- ... p-benefits. But......

You have no idea unless you work in supply chain or are a customs officer.


try to buy a stupid CPU socket made outside of the PRC. That is hard...... everyday stuff.... not that much anymore. I know, i haven´t been buying stuff made in the PRC for ~10 years, and it has become exceedingly easy.

Zaf wrote:
People will realize how much of everyday goods are made in China. You have no idea unless you work in supply chain or are a customs officer.


Shanghai stock exchange indexes seem to be rebounding.

best regards
Thomas
Well, there is prophecy in the bible after all: 2 Timothy 3:1-6
 
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Jouhou
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Re: China isolation impact on the rest of the world

Fri Feb 07, 2020 7:09 pm

The goods China has a real stranglehold on are electronics using rare earth elements (China is the world's largest producer of REEs by a long shot, and electronics manufacturers relocated there to avoid supply disruptions due to export quotas etc.). Electronics at least are not essential items. There are worries about shortages of medications and vitamins since China is the source of a large proportion of the ingredients, but they aren't the only place that makes these.
情報
 
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Erebus
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Re: China isolation impact on the rest of the world

Fri Feb 07, 2020 8:56 pm

Jouhou wrote:
The goods China has a real stranglehold on are electronics using rare earth elements (China is the world's largest producer of REEs by a long shot, and electronics manufacturers relocated there to avoid supply disruptions due to export quotas etc.). Electronics at least are not essential items. There are worries about shortages of medications and vitamins since China is the source of a large proportion of the ingredients, but they aren't the only place that makes these.


My company sources a majority of its printed circuit boards and some other electronics components from China. We have growing concerns about our supply shipments in the wake of this outbreak, and are actively looking for alternatives. That is just what we get directly from China. We know that some of the other components, parts and metals we get from non-Chinese suppliers also have some links to China further up the supply chain. If this virus outbreak really goes nuts, the more disruptive it is going to get for our production.
 
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Jouhou
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Re: China isolation impact on the rest of the world

Sat Feb 08, 2020 9:37 pm

Erebus wrote:
Jouhou wrote:
The goods China has a real stranglehold on are electronics using rare earth elements (China is the world's largest producer of REEs by a long shot, and electronics manufacturers relocated there to avoid supply disruptions due to export quotas etc.). Electronics at least are not essential items. There are worries about shortages of medications and vitamins since China is the source of a large proportion of the ingredients, but they aren't the only place that makes these.


My company sources a majority of its printed circuit boards and some other electronics components from China. We have growing concerns about our supply shipments in the wake of this outbreak, and are actively looking for alternatives. That is just what we get directly from China. We know that some of the other components, parts and metals we get from non-Chinese suppliers also have some links to China further up the supply chain. If this virus outbreak really goes nuts, the more disruptive it is going to get for our production.


I actually have kept a pile of my old electronics stored away for if/when China's supply of REEs gets cut off from us again. Last time that happened suddenly everyone wanted our old electronics for "recycling". I figured I'd wait for when that time came around again because it seemed inevitable.
情報
 
sonicruiser
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Re: China isolation impact on the rest of the world

Sun Feb 09, 2020 6:24 am

It's actually not China being isolated from the rest of the world. It's the inverse.

If trade with China was cut in half tomorrow, China would be hurt, but they would stabilize fairly quickly. The rest of the world would fare a lot worse than China, since pretty much any country not called the US doesn't have even a tenth of the self-sufficiency of either China or the US.

Isolation hurts the person who needs something. China is the exporter, not the importer. It is the world being isolated from China. This phenomenon is already becoming clear with the 5G dilemma in the west. Countries are having to pick between embracing Huawei's 5G or getting left years behind. China is going to keep building 5G regardless of what the west does, so the west will become isolated from Asia and the rest of the world embracing China's 5G. Even if the west goes their own way, they are already several years behind China and that gap is growing. Chinese technology is extremely popular in Asia where most of the world's population and economic growth is for the next few decades, and China is investing heavily in it while the west is not. The risk of isolation for the west from China and the rest of the world is real. The US sees China as a security threat, but most other countries don't especially those friendly to China.

This is a map of countries that have signed onto China's Belt and Road Initiative

Image
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T54A
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Re: China isolation impact on the rest of the world

Sun Feb 09, 2020 7:16 am

I already know of a business that can’t order extra stock because factory workers who were on Chinese New Year break can’t get back to work.
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melpax
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Re: China isolation impact on the rest of the world

Sun Feb 09, 2020 1:23 pm

Aaron747 wrote:
Many tourist sites will be at their most enjoyable in years without the tour groups and extra crowding.


Already starting to happen in Australia. Though if this continues on for the next few months, it could mean that more people might take domestic holidays instead of places like Bali, Phuket, etc.

https://www.theage.com.au/national/vict ... 53yu1.html
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olle
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Re: China isolation impact on the rest of the world

Sun Feb 09, 2020 8:38 pm

China government has been using democratic less smart moments like brexit to show why democracy do not work.

SARS and now this shows why non open societies get them self in trouble i other ways. It takes a lot of currage from the leaderships to stay transparent and have trust from their citizens when things go bad...
 
chimborazo
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Re: China isolation impact on the rest of the world

Sun Feb 09, 2020 9:21 pm

Aaron747 wrote:
Many tourist sites will be at their most enjoyable in years without the tour groups and extra crowding.


And there won’t be so many people coughing on you without covering their mouth and gobbing giant green oysters everywhere.

I had to fight my way through a huge crowd of Chinese tourists to get out of the night market in Bangkok in mid Jan. I travel worldwide a lot and have been coughed on a lot.... but never so much as in that short period. Coincidentally- and I’m sure it is just that- I have had a bad cold/cough/chest infection for last two weeks.
 
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lightsaber
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Re: China isolation impact on the rest of the world

Mon Feb 10, 2020 2:42 am

We cannot untie globalization in a year, probably not even in three years. Auto factories in Korea are already shutting down:
https://www.straitstimes.com/business/e ... -car-plant

Now, US factories are buffered by about a 6 week transit time. Due to the Lunar New Year, we'll happily post about no effect until there is a big effect.

The EU has a little longer transit time, but same impact.

While the Chinese could have stopped this if they had taken action 3 weeks earlier, it is too late to cry over that. What is the corrective action plan? I was amused about the comments on 2nd hand goods now having value. Ok, now what about the seals (gaskets), filters, hoses, and all the other parts made in China. If a refrigerator is missing one important part, it cannot ship. Same with a car, TV, blender, or jet aircraft.

I suspect shortly after the factories, we will be hit for little parts for car/bus/train/refrigerator/dishwasher repairs. I just had to scrap a stovetop as it failed after most people replaced the model and thus spare parts were pricey and long lead time. Hmmm....

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lightsaber
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Re: China isolation impact on the rest of the world

Mon Feb 10, 2020 2:57 am

I decided to do a little research on the impact:
https://www.unionleader.com/news/busine ... 17111.html
Furniture factories need labor (management) from China and from the link“We’ve also heard that Hangzhou is telling factories they can’t open until March 1, and that’s a really key fabric area,” Wood said. “If that happens, then we’ll be greatly affected.”

That link notes shoe fabric/materials is particularly dependent on China. I have nice American and European made shoes (only a few), that were VERY expensive and splurges (some I bought 20 years ago, this is not even a yearly purchase). But can they be made without Chinese materials?

https://www.reuters.com/article/us-chin ... SKBN1ZZ0B1
Looks like Electrolux (vacuums?) is hit due to lack of parts
Cruise lines are in trouble. Sadly (I haven't been on a cruise in a decade, but I like them!)

https://www.cnbc.com/2020/02/09/coronav ... break.html
Barcelona's mobile world conference has been hit (Amazon, among others, pulled out)

70 Exhibitors pulled out of Singapore air show:
https://www.bangkokpost.com/world/18538 ... s-pull-out

The above hurts aviation as face to face meetings help sell aircraft.

Overall, this will force a global economic slowdown. For example, all the Global Luxury brands are seeing slowing sales. Hubei seems to be a material (fabric) center, so it looks like clothing and shoes will be hard hit. So the fashion industries, which are very dependent on 'fast fashion' could be the first hit. But as the fabric is what is impacted, this won't be felt at retail for 2 or 3 months.

Lightsaber
Winter is coming.
 
mrgrtt123
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Re: China isolation impact on the rest of the world

Mon Feb 10, 2020 3:05 am

What happens to the country is a major drawback. The world is affected by the virus outbreak, countries have closed their border. I hope that the creation of the cure will be faster since the cases are getting high every day.
 
mham001
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Re: China isolation impact on the rest of the world

Mon Feb 10, 2020 3:21 am

sonicruiser wrote:
It's actually not China being isolated from the rest of the world. It's the inverse.

If trade with China was cut in half tomorrow, China would be hurt, but they would stabilize fairly quickly. The rest of the world would fare a lot worse than China, since pretty much any country not called the US doesn't have even a tenth of the self-sufficiency of either China or the US.

Isolation hurts the person who needs something. China is the exporter, not the importer. It is the world being isolated from China. This phenomenon is already becoming clear with the 5G dilemma in the west. Countries are having to pick between embracing Huawei's 5G or getting left years behind. China is going to keep building 5G regardless of what the west does, so the west will become isolated from Asia and the rest of the world embracing China's 5G. Even if the west goes their own way, they are already several years behind China and that gap is growing. Chinese technology is extremely popular in Asia where most of the world's population and economic growth is for the next few decades, and China is investing heavily in it while the west is not. The risk of isolation for the west from China and the rest of the world is real. The US sees China as a security threat, but most other countries don't especially those friendly to China.


Complete and utter BS. We have 5G rolling out from all four major US carriers as we speak. Not one of them is using Huawei equipment. As if only the Chinese can design and build electronics. Just silly. https://www.cnet.com/news/verizon-vs-at ... ak-speeds/

BTW, if you were well-traveled, you'd know that China's neighbors largely HATE them but are often beholden simply because of their clout.
 
sonicruiser
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Re: China isolation impact on the rest of the world

Mon Feb 10, 2020 5:12 am

mham001 wrote:
Complete and utter BS. We have 5G rolling out from all four major US carriers as we speak. Not one of them is using Huawei equipment. As if only the Chinese can design and build electronics. Just silly. https://www.cnet.com/news/verizon-vs-at ... ak-speeds/


Yeah, and tell me how many countries have access to 5G from US carriers? Zero.

Meanwhile Huawei is promoting 5G in every country that will take it, which is at least half of Asia and possibly Europe.

Not wanting to share technology is exactly how America got blindsided by Chinese expansionism in the first place.

For decades, the US monopoly thought that they could refuse to share technology with other countries, and no one else could replace them. Clearly that backfired and China has taken full advantage of US daydreams to exploit developing markets by offering Huawei as a popular alternative to US technology. In fact, with China’s developments in AI, they have actually outpaced the US altogether and now it is China as the innovator and the US playing catch up.

China should send a thank you note to the US for America's move towards insularism, because while America decides that they should exclusively protect their own 5G, China is going to steamroll ahead and build up their own 5G around the world since the US certainly won't do it. Most countries don't have the option of US 5G, they only have Huawei 5G or bust. So they'll take China's 5G while American global influence languishes in the grave of insular thinking. The US should note one thing: You cannot have global influence without spreading that influence. Keeping technology all to yourself is a great way to ensure you will slowly but surely become globally irrelevant. China has built up 5G across Asia and Europe, meanwhile the US is asleep at the wheel and is only now realizing what has been going on. In the developing world, Chinese market share of technology has been and still is blowing the doors off of the US. And unless the US decides it wants to share its technology with the developing world, you can be guaranteed that China will remain on top as the market leader for a long time to come.

The current US approach to China is like trying to stop an avalanche with a couple of shovels. US knows there is no way they can compete with China so if the US is going down, they want to take China down with them. So you have a misguided effort of tariffs which hurts China's economy but does absolutely nothing to stop China's increasing soft power and presence around the globe. Tariffs and some lobbyists in DC are not going to stop China from rolling out AI and 5G across the developing world. What the US should be doing is competing head to head with China on substance, as that can actually give people an alternative to Chinese products. US global presence is going to be hit with a sledgehammer in the next few years if the US doesn't start expanding into the developing world ASAP and taking back some market share from China. Trying to stop China by targeting their economy instead of their market share is like trying to cook a pizza without dough. If you target China's economy, you're impacting money they've already made, not their ability to make it. China's economy is strong because of their dominant market share in the developing world which is still completely ignored by the US even today as America has a virtually nonexistent presence in those countries with no American firms competing and offering alternatives to Chinese companies. Until the US realizes it's not tariffs but actually having American companies compete head to head with China in the developing world with their own products, the US is trying to bake a pizza with just cheese; it's a misguided effort that won't work.
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olle
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Re: China isolation impact on the rest of the world

Mon Feb 10, 2020 6:44 am

As a risk and compliance officer I can see that purchasing will add demand when sourcing. Political riskwill bevalued higher. This includes trump effect on Amazon and Azure. Many European companies looking right now for alternatives and I would not be surprised to see one soon.

I can see India Afrika etc become more interesting as second supplier of spare parts.

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