China’s Factories Scramble 🏭

Table of Contents

China’s Factories Scramble – How Covid and U.S. Demand Crippled Chinese Factories 

In the Western world, the troublesome worries and effects of Covid-19 have been extinguished by considerable margins in the last year; however, this luxury has not been experienced in several other countries, most especially, in China. In the past several months, China has experienced record infection rates, with one specific week in December totalling on average 37 million new infections a day. A recent report suggests that since the start of the pandemic, the total number of infections in China reached 900 million people, roughly 64% of the population. In accordance with China’s strict Covid-prevention policies, several detrimental effects have begun to plague China’s number one revenue contributor: manufacturing. Not only does China hold the title of the world’s second-largest economy, but they have been the running largest exporter of goods for almost 15 years.

Popular toy maker Basic Fun, the creator of Care Bears and Tonka Trucks, experienced the effects of such circumstances recently. In January, manufacturing workers were advised to not return for a period of almost 3 weeks, causing major disruptions in all Basic Fun’s 20 China-based factories. Even trillion-dollar tech company Apple had its own production issues within factories in China, being a major factor in its revenue miss for Q4. However, Covid isn’t necessarily the largest contributor to these supply chain disturbances. Excess supply and inventories created throughout the U.S.’s stimulated consumer demand cycles during the former half of 2022 have completely inundated several production factories across the country. Seeing as the U.S. is the largest trade partner in China, both countries operate in tandem, with the U.S. providing the demand and China providing the supply. With higher interest rates and inflation diminishing demand across America, China has struggled to fulfil orders that have left surpluses waiting to be sold. As of late, China will either have to adapt their workforces to be able to make steady revenues or take the risk of much larger declines in economic growth.

Want to learn how to invest? Download the Invstr app, where you can play Fantasy Finance and manage a virtual investment portfolio or open a brokerage account and invest for real. Take our interactive investing course on Invstr Academy and become a better investor today!

I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.

Share:
More Posts
PGA Tour Enters Investment Talks 💪

As reported on Thursday, both Endeavor Group and Fenway Sports have displayed interest and begun discussions to provide investment in the PGA Tour.

Nike Just Didn’t Do It 📉

Providing one of the biggest earnings reports of the week, $140 billion shoe and clothing retailer Nike posted a significant slip.

Market Recap – September 28th 💰

After the 10-year Treasury yield bond fell off from its 15-year high, investors added some value back into the market, focusing all short-term attention on Friday’s PCE price index reading.

The Crude Oil Bust 🛢

Surging global crude oil prices, driven by factors like OPEC+ production cuts have pushed U.S. West Texas Intermediate futures to over $95 per barrel.

Get your daily Invstr Crunch

Get the market news and updates you need, delivered to your inbox or available on our daily podcast.

Risk Disclosure:

Invstr is not a bank and banking services are provided by Vast Bank, N.A.

Brokerage and Banking services are currently only available to U.S. residents.

Invstr app and web services are provided by Invstr Ltd. Advisory services are provided by Invstr Financial LLC, an investment adviser registered with the Securities Exchange Commission (SEC) details of which can be obtained here. Securities brokerage and custody services are provided by Apex Clearing, a broker dealer registered with the SEC and a member of FINRA and SIPC. There is no bank guarantee on securities and securities may lose value.

Investing involves risk and can lead to losses. Past performance does not guarantee future results.

Invstr app and web services are provided by Invstr Ltd. Invstr+ advisory services are provided by Invstr Financial LLC, an investment adviser registered with the Securities Exchange Commission (SEC). Securities brokerage and custody services are provided by Apex Clearing, a broker dealer registered with the SEC and a member of FINRA and SIPC. There is no bank guarantee on securities and securities may lose value. Vast Bank N.A. a nationally chartered bank and member of the FDIC, provides the banking products, including the products and services related to digital asset accounts. As with any asset, the value of Digital assets can go up or down and there can be a substantial risk that you lose money buying or holding digital assets. You should carefully consider whether trading or holding Digital assets is suitable for you in light of your financial condition. Your digital account does not support wallet to wallet transferring of your digital assets (i.e. cryptocurrencies) outside the platform. Any Digital Assets in your digital asset account are not insured by any government entities, including but not limited to FDIC or SIPC. The Invstr Visa® Debit Card is issued by Vast Bank, N.A. pursuant to a license from Visa U.S.A Inc and may be used everywhere Visa debit cards are accepted. Invstr Ltd, Invstr Financial LLC and Invstr Securities Ltd are subsidiaries of Marketspringpad Holdings (collectively “Invstr”) and Invstr is solely responsible for the application services and website content.

Watchlists provided when users first access the service are not a recommendation to invest. Instead they are provided to help users better navigate the service. Users are free to edit and create their own watchlists. From time to time, Invstr will suggest instruments solely based on an individual’s interest and the interest levels of the Invstr community. The statistical and portfolio builder models generated by Invstr do not reflect actual investment results and are not guarantees of future results. Comments provided by Invstr leaders, influencers or members of the Invstr Community are not recommendations and should not be construed as such. Invstr does not endorse the content or the positions posted by them. Their investment approach, and that of the models provided by Invstr, may be different from yours and may not be appropriate for you.