Over the last few decades, China has burnished its reputation as the ‘Factory of the World’.  Companies from around the world rushed to set up manufacturing plants in the East Asian nation in order to (quite sensibly) take advantage of its cheap labour, plentiful resources, and the various incentives on offer.

Over the last few decades, China has burnished its reputation as the ‘Factory of the World’.  Companies from around the world rushed to set up manufacturing plants in the East Asian nation in order to (quite sensibly) take advantage of its cheap labour, plentiful resources, and the various incentives on offer. Easy access to ports and shipping lines meant that companies could afford to hold minimal inventories and follow a JIT (Just-In-Time) inventory control philosophy, leading to higher profits and lower prices for customers. Everything went off without a hitch, until COVID-19 brought global trade to a halt.

The global trade apparatus is a giant, complex machine with many moving parts. And it’s not easy to get a machine going again when it suffers an abrupt breakdown. Of course, Chinese factories resumed production before long, but it wasn’t as instantaneous as one would have liked. Like a rusty old car that creaks, groans, and then slowly sputters to life on a cold day, it took some time for normalcy to return and in the meantime, consumers worldwide had to put up with shipping delays or go through the hassle of asking for refunds from retailer.

 

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