China’s Covid fight may sicken global supply chains

Is it now China’s turn to spook the globe with inflation? It’s hard not to wonder as Omicron prompts Asia’s biggest economy to institute new lockdowns that are sure to upend supply chains and intensify global price pressures.

If that happens, it could shift China from an economic hero of the Covid era to its villain. Until now, the mainland’s massive factory economy acted as a giant shock absorber to keep prices “quite manageable,” note leading China economists like Grace Ng at JPMorgan.

Chinese producers effectively ate double-digit surges in raw material pricing, judging that the fallout from consumer price spikes would be worse than reduced corporate profits.

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