Fed chair says China's zero-COVID policy damages global supply chain
By arseniotoledo // 2022-12-02
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China's extreme and repressive Wuhan coronavirus (COVID-19) restrictions have affected the American economy by harming global supply chains, said Federal Reserve Chairman Jerome Powell. The Fed chair added that when certain regions or cities in China initiate full shutdowns, if those areas are deeply connected to the global economy, supply chains become "less efficient, less effective," and the prices of goods that those areas manufactured or assembled are also affected. Powell made this statement as signs increased in the world of finance that the Chinese Communist Party's (CCP) zero-COVID policy was taking a toll on the world's second-largest economy, leading to weaker consumer demand, disrupted production and weaker short-term economic prospects. All of these, Powell noted, also directly impact the United States. (Related: Chaos in China: Rushed exit from zero-COVID strategy could COLLAPSE Chinese economy.) International pressure is mounting for the CCP to roll back its zero-COVID policy. The International Monetary Fund (IMF), for example, urged Beijing to "recalibrate" its COVID-19 policy to be more responsive to the economy. The IMF also urged the communist regime to enact market reforms to raise productivity and deliver more medium- and long-term growth. These statements from Powell and the IMF come after analysts revised their estimate on Chinese year-over-year GDP growth to 3.3 percent, far bellow the CCP's official target of "around 5.5 percent" set back in March. Zero-COVID is even affecting Chinese consumers. Holiday spending during China's week-long National Day break during the week including Oct. 1 fell by 56 percent compared to pre-pandemic levels. Chinese GDP also grew by only 3.9 percent over the three months ending in September, far below the 4.9 percent growth seen over the same period in 2021. "People are locked down at home a lot of the time, so they're not out spending money," said David Dollar, senior fellow at the Brookings Institution and an expert on U.S.-Chinese economic relations.

Zero-COVID contributing to inflation in America

The supply chain bottlenecks affecting Chinese manufacturing are contributing to U.S. inflation. "When consumers are locked down in these different cities, it's a gut punch to the U.S. economy," said Dan Ives, managing director of equity research at investment firm Wedbush. "It has reached a fork in the road." Meanwhile, Dollar noted that America is still heavily reliant on Chinese imports and that the problems in Chinese supply chains mean their products do not reach U.S. markets, contributing to inflationary pressures. One prominent example of zero-COVID's effects on inflation is how shutdown policies have affected the global supply of iPhones. There is a major shortage just as major markets are heading into the holidays and more consumers are expected to order iPhones for themselves and their loved ones as gifts. Shortages have reached as low as 35 percent of typical holiday inventory in some stores, causing overall demand to outstrip supply by a ratio of three to one. Ives noted that the iPhone shortage is merely the "poster child" of a larger trend. Zero-COVID is reducing the supply of most goods from China by an estimated 10 percent to 20 percent. Dollar concluded by pointing out that removing zero-COVID is beneficial to both the U.S. and Chinese economies. "If China were growing well, it'd be importing more from the U.S., contributing to the profits of U.S. companies that operate there and stimulating the Chinese economy. But that's all not happening this year," he noted. Learn more about the anti-zero-COVID protests in China at CommunistChina.news. Watch this episode of the "Health Ranger Report" as Mike Adams, the Health Ranger, discusses how China is waging war on its own citizens while also preparing for war against the United States. This video is from the Health Ranger Report channel on Brighteon.com.

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