In a shocking move, China has shut down part of one of the world’s largest ports after an employee there tested positive for the coronavirus, Bloomberg reports.
The question now is what effect this will have on the global economy. The short answer? Experts don’t know yet.
What we know
The partially closed port, Ningbo-Zhoushan Port, was said in 2020 to be the world’s third-largest port by cargo volume.
The shutdown of the port’s Meishan terminal was reportedly ordered after it was discovered that a worker had contracted COVID-19. That terminal accounts for some 25% of container cargo that goes through the port.
China, for its part, is currently facing its worst coronavirus outbreak in months, with the delta variant spreading to at least 48 cities and infecting over 1,200 people, officials say, although the authenticity of these numbers has been questioned. The communist government’s response to the infections has been swift and severe, and the recent closure at the Ningbo-Zhoushan Port is no exception.
As Hugo De Stoop, the CEO of Euronav NV, an oil company, told Bloomberg, “The Chinese authorities are very very strict. When they find a case they will be very quick to shutdown, isolate the workers, isolate the coworkers who have had contact with that specific worker, and then reopen as quickly as possible.”
And it seems that’s exactly what’s happening. On top of the port being shut down, reports indicate that the infected worker’s contacts have been identified and forced to quarantine.
As for the world economy, the future is looking similarly bleak.
“The fear is that this new disruption will further strain shipping and supplies of goods, dampening growth and driving up prices,” Bloomberg explained in its report. “An extended shuttering at Ningbo could be especially painful for the world economy because seaborne trade usually rises toward the end of the year as companies ship Christmas and holiday products.
Some of the most important exports that go through the Ningbo-Zhoushan Port include electronic goods, textiles, and low and high-end manufactured goods, reports note.
China recently shut down another port, the Yantian Port, and the result of that was near-record-high freight rates that only exacerbated an ongoing inflation problem.
Only time will tell if this closure results in a similar outcome.