China Flooding Causes Supply Chain Disruption

July 23, 2021

China flooding causes supply chain disruption: report

Massive flooding in China is disrupting the country’s supply chain, including the production of food, cars and coal, according to a report.

Even as power and travel infrastructure were restored in the country, damage caused by several days of downpour continued Thursday to cause trouble for the production and distribution of goods across the spectrum.

“As Zhengzhou is a top national transportation hub and Henan province is a major producer of grains, raw materials and some manufactured products like iPhones, we believe the rainfall and flooding will have a material impact on business activity and inflation in the short term,” Nomura analysts wrote, according to Reuters.

Reuters also reported, SAIC Motor, China’s largest car maker, warned of derailed logistics at its Zhengzhou plant. In addition to wreaking havoc on China’s supply chain in the short term, the floods could in the long-term harm farm output, since rainwater can spread disease on farms.

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