So…here we go again? The outbreak of Covid-19 (Corona virus) has already had a massive impact around the globe, and whilst any death is tragic from such an outbreak, the fact that 0.5m people die of basic influenza every year seems to have been forgotten. However, the insatiable 24-hour media loves a crisis, and so we are plunged headlong into another round of “China bashing”.
It’s a curious situation, as for ceramics, companies the virus is a blessing for many of the previously adversely affected manufacturing sectors that had suffered under Chinese dumping and exports for so long.
The flip-side is that whilst these companies see a chance to expand their market presence, invest in revitalizing capacity and winning orders, they are then turning to their own supply chain and realizing that a bulk of chemicals and raw materials are being sourced from the country and as such their own supplies are under threat.
For end-users, tableware sourcers in particular are feeling the squeeze, as factory workers across many of the country’s more productive provinces for crockery and porcelain are restricted in movement and subsequently not returning to work. This continues to put the pressure on already stretched inventories.
For those dependent on selling raw material into the country too, especially the zircon sector, glaze and colour makers and high value clays, demand is dropping as fast as the prices. With fuel costs plummeting as demand drops away and factories utiliise substantially less, so cheaper manufacture elsewhere becomes a possibility and yet such has been the dependence on the People’s Republic for so long that it is uncertain if those factories that could benefit most can actually spring into life to recapture previously lost market share.
There is an adage in industry termed “maintenance of essential capability”. If you sell yourself out and become totally dependent elsewhere, generally for shorter term gain, then when a crisis hits and your supply line is disrupted, you will suffer even more than the heartland that supplies you.
In Africa right now, for example, construction projects are stalling as supplies from China to fuel them slow down dramatically. Countries and sectors that allowed themselves to be opened up to Chinese involvement to such a high level are now reaping the negatives.
Perhaps, therefore, instead of bashing China and seeing an opportunity for some nationalistic hubris, what about lending some support to the country that for so many has driven economies and been the ultimate supplier for so long?
This crisis will pass, but the memories that China emerges with will be long lasting. Can some of these other nations really take that chance?
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