America Exposed To Immediate Impact From “Supply-Chain Shock”, Deutsche Says

New analysis on the effect of China’s coronovirus on the global economy.

Easy Money

In the last few weeks, ZeroHedge provided many articles on the evidence of creaking global supply chains fast emerging in China and spreading outwards. Anyone in supply chain management, monitoring the flow of goods and services from China, has to be worried about which regions will be impacted the most (even if the stock market couldn’t care less).  

Deutsche Bank’s senior European economist Clemente Delucia and economist Michael Kirker published a note on Thursday titled “The impact of the coronavirus: A supply-chain analysis” identifying the effect of contagion on the rest of the world, mainly focusing on demand and spillover effects into other countries. 

The economists constructed a ‘dependency indicator,’ to figure out just how much a country depends on China for the supply of particular imported inputs. It was noted that the more a country depends on China, the more challenging it could be for businesses to find…

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6 thoughts on “America Exposed To Immediate Impact From “Supply-Chain Shock”, Deutsche Says

    • Great link, thanks barovsky. This morning the BBC is reporting a large number of cases in Italy involving no Chinese contact whatsoever. I think that WHO may need to come up with a new strategy that doesn’t involve shutting down the global economy.

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      • I think the best that can be done is exactly as Moon of Alabama states:

        China’s rigorous handling of the outbreak, after a too slow start, is a great success. There will be at times new clusters suddenly emerging like the two prisons today. But a greater catastrophe has been avoided.

        But can we expect such ‘rigorous handling’ in the West? I doubt it, there are just too many conflicting interests, each of which wants a different ‘outcome’. Ultimately, it will, like other comparable epidemics, have to ‘run its course’.

        The ‘up side’ if that’s what we can call it, is that the majority of deaths occur to people in specific categories: the old, with compromised immune systems; those with pre-existing health conditions, especially to the lungs and of course, the poor with inadequate diets (compromised immune system) and lack of adequate healthcare. And the death stats bear this out (it appears to be between 2% – 3% of those who contract the disease).

        I’d hate to see what it did to people in city like Mumbai or Mexico City, millions jammed together with virtually non-existent comprehensive healthcare.

        Capitalism has created the optimum conditions for this disease; factory food systems; massive use of antibiotics; monocultures; and the nail in the coffin, the essentially forced relocation of people from country into cities that are unprepared to receive so many millions; lack of sanitation; overcrowding; polluted water and air.

        Perhaps some good can come of it? The beginning of the end of globalised neoliberalism?

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  1. You make an excellent point, barovsky. In the West poor people infected with coronavirus will be left to die. The only silver lining, as you point out, is the disease will most likely put a serious dent in globalised neoliberalism.

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