BEIJING -

India's pharmaceutical producers are watching the news from Shanghai with concern, and Japan's Toyota and Nissan have made tough decisions to reduce car production, while US electric car giant Tesla has shut down its plant in The city, which produces about two thousand electric cars per day.

The complete closure of the Chinese city of Shanghai, after recording increasing infections with the Corona pandemic, in the city of 25 million people and the busiest ports in the world, has affected multiple sectors around the world, following the chaos in global supply chains.

The ship tracking images show the scale of the problem, as thousands of ships are idled off the coast of China, which has led to long delays in transporting goods and rising prices.

Lin Xiuping, founder of the Nanshan Industrial Academy, says in an article he published on May 5 that stopping an industrial chain needs one decision;

But restarting this chain often takes several months;

Due to a complete interconnected system failure.

stuck ships

Shanghai bears a huge burden as a container port, as it alone handled 20% of China's freight traffic in 2021.

From January to February 2022, the cumulative container transportation rate of Shanghai Port exceeded 8.16 million TEUs, with an annual growth rate of 9.7%, and the growth rate continued to increase.

Capital Economics warned in its latest reports that emerging Asian economies such as Vietnam and Cambodia could suffer the biggest blow due to their reliance on Chinese inputs for manufacturing.

Chinese components contribute 24% of the total added value of Vietnam's manufacturing sector.

Nor will others be immune. Goods imported directly or indirectly from China make up more than 20% of Japan's total imports, and more than 15% of US purchases from abroad.

For example, of Apple's 200 major suppliers in the US, about half are located in neighboring Shanghai and Suzhou.

India is a major producer of medicines, but 70% of its active pharmaceutical ingredients are sourced from China.

These concerns reflect the possibility that disruptions to international supply chains for everything from medicines to electric vehicles could halt the global economic recovery.

the specter of inflation

The researcher in political economy, Ahmed Omar, says that the delay in shipping from the main ports in China, especially Shanghai, will lead to a shortage of goods in international markets, followed by a rise in prices, which will affect the growth rates of some economies.

Omar added to Al Jazeera Net, that the decrease in the pace of sales from inside China will affect local growth rates, which will reflect on the global economy, as it is the second largest economic power, and cause an increase in financial inflation.

In 2021, Shanghai contributed 3.8 percent of the country's GDP, but the latest shutdown threatens to achieve the expected economic growth target, which is 5.5 percent this year, which, if achieved, will boost China's economic growth by 0.2 percentage points.

Looking at the Shanghai Containerized Freight Index, which has fallen due to the war in Ukraine, it continues to slide, indicating a decline in Shanghai's exports.

vehicle crisis

China can mitigate the impact of the Shanghai closure on global trade by switching to its other ports.

Where, Wang Huiyao, director of the Center for China and Globalization in Beijing, told Al Jazeera Net, that China owns 7 of the 10 largest container ports in the world, and it can still serve the world.

But the price of a shipping container increased anywhere from 3 to 5 times.

Although it does not represent a large part of the final cost of an item to the consumer, it can all add up and contribute to inflation.

The Russian war on Ukraine has also caused further chaos to global supply chains, and higher energy prices have increased shipping costs.

Following the clashes in Ukraine, some flights were canceled or rerouted, putting additional pressure on cargo capacity and jeopardizing global supplies such as platinum, aluminum, sunflower oil and steel, and closing factories in Europe, Ukraine and Russia.