China's spread of Omikron is increasing the possibility that China's large cities will go through or be blocked by the city's blockade of Shanghai, which will last more than a month. China, which has a poor healthcare system compared to its population and does not solve the zero-COVID-19 for political reasons inside China, is seriously hurting not only exports but also domestic demand.
The blockade of Shanghai's port has hurt Shanghai's export volume, and the Shanghai area's manufacturing and logistics have not been able to operate, spreading the aftermath to Shanghai and other regions. Main source materials of Shanghai and Zhejiang Province, such as fabrics, hardware, motors, etc., which were normally supplied within 15 days, are not supplied in time, and even sofa factories in Guangdong Province, which are far away, are facing production disruptions. China's urban blockade has a significant impact on exports as well as domestic demand, and more than 30% of what I ordered online shopping has not been received for a month due to urban blockade, so it is also a big blow to China's domestic market, such as cancellation of some.
[China's economic slump due to sluggish real estate and stock markets]
China's strong real estate control policy in 2021 stabilized real estate prices in China, but the problem is that the Chinese real estate market has now flowed into a transaction cliff with few real estate transactions. As a result, the Chinese government is belatedly trying to revitalize real estate by releasing real estate loans and releasing one house per household of real estate owners, but the problem is that people have no money due to the long COVID-19 period. With China's economy stabilizing since 2010, most small and medium-sized enterprises have become more competitive and less profitable, the only big revenue vehicle for the Chinese has been property speculation. The sharp rise in real estate prices since 2010 has led to a significant increase in real estate prices in large cities, but through this, the overconsumption of Chinese people, such as luxury cars and travel, has become a direct and indirect boost to the Chinese economy. China's real estate control policy, which is neck-and-neck, eventually led to bankruptcy of large construction companies like Hengda Group and lifted the real estate control policy of Chinese people whose income has already decreased due to COVID-19, but it is hard to find a house.
Another blunder that dried up the Chinese people's money was the Chinese government's corporate control centered on Chinese IT companies, which led to an endless fall in stock prices due to increased instability in the Chinese stock market. Many Chinese people have turned to the stock market due to real estate controls, but stock prices have only been falling despite the recent Chinese government's stimulus policy.
In the end, it is difficult to expect that the economy will grow again as fast as in the past despite the efforts of the Chinese government due to the impact of COVID-19, the trading cliff of the real estate market, and the decline in stock prices.
[Conclusion]
The U.S. quantitative reduction policy, Russia's invasion of Ukraine, rising raw material prices, and global consumption contraction are the pains of all countries, but China is inevitably sluggish due to changes in its overseas supply chain. It is clear that the city blockade caused by the zero-corona policy as well as sluggish consumption, real estate, and stock market within China will have a serious impact on China's domestic economy, reducing the vitality of the Chinese economy.
In particular, Chinese sofa factories, which are still going the worst way due to high shipping rates, shrinking consumption in the trading market and changing supply chains, are expected to close a large number of factories in 2022. This is not just a problem with Chinese sofa factories, but I think it is a reality that a large number of Chinese export manufacturing industries experience.
In conclusion, when asked if the future of China's economy will improve, I'm not an economist, and there are so many variables, but I don't know if the future of China's sofa factory will improve in two years.
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