London Daily

Focus on the big picture.
Saturday, Feb 22, 2025

China lockdown: What do zero-Covid policies mean for UK prices?

China lockdown: What do zero-Covid policies mean for UK prices?

Some of China's biggest cities have been hit by major Covid lockdowns this spring, and it's had a disruptive effect on the country's economy.

However, it's not just people in China who are going to be affected.

As one of the world's biggest exporters, any halt in production could have an impact on prices for consumers across the world, including the UK - which last year imported nearly £70bn worth of goods from China.


Phones


China produces more than a third of the world's electronic goods.

Mobile phones are one of the top categories of goods that the UK buys from China. Between 2020 and 2021, the UK imported £7.3bn worth of telecoms and sound equipment.

Several companies that supply components for Apple - Pegatron, Quanta Group and Compal Electronics - have had to close factories in the Shanghai area because of Covid lockdowns.

By mid-April, the production of three million iPhones had already been affected, according to analysis from investment firm Wedbush Securities, with knock-on effects expected on iPads and MacBooks.

The production of iPhones has been significantly delayed


Chinese telecoms giant Huawei has also delayed opening a new plant in Shanghai.

The city produces about one third of all of China's computer chips, while the neighbouring province of Jiangsu produces about 10%.

The sector was already experiencing supply problems because of a surge in demand last year.


Computers


Lockdowns could also affect the production of computers and printers.

This is not just about delays to exports - it is also because China needs to import key materials in order to produce the semi-conductors in these devices.

Covid restrictions mean that deliveries to Europe have been delayed by an average of seven days, says Alicia Garcia-Herrero from the Brussels-based think tank, Bruegel.

Transport delays could mean higher prices for computers and laptops


Currys PC World told the BBC that the impact of lockdowns was yet to filter through in terms of the availability of products. But it said it was now seeing increasing costs caused by transport problems in China.

China has tried to keep some factories running and ports open by having key workers stay on the premises. However, despite this, it is reported that Shanghai - the biggest container port in the world - is still not operating at normal capacity.

Lockdowns have also lengthened delivery times because Chinese businesses have started shipping their products using alternative ports, which are further away.


Cars


The UK doesn't source many cars directly from China but does buy a lot from the EU, with the bloc accounting for more than 80% of UK vehicle imports in 2020.

EU car production relies heavily on Chinese-made components - for example, most German tyres and brake pads are made in China, according to Chinese official data.

Components made in China are used in millions of vehicles assembled in Europe


Manufacturing areas such as Guangdong, Jilin and Shanghai have all been under various lockdowns in recent months.

As with electronic goods, car production was also hit by the global chip shortage last year. The sector is now having to deal with transport delays and backlogs caused by lockdowns as well.

In March, the prices for some of the most popular cars in the UK were already as much as 26% higher compared with three years ago, according to one car-buying website.

Ms Garcia-Herrero says if China raises its prices because of increasing costs from the lockdowns, "the consumer in the UK will end up paying for it".


Clothing


Clothing is the fourth largest category of goods imported by the UK from China.

Jiangsu province, 250 km north of Shanghai, accounts for over 12% of China's clothing production, according to official data.

Although many factories remained open by keeping workers in a "closed loop" system, transport problems have affected exports. In April, the province closed more than 100 toll booths on the main roads to Shanghai and other major export hubs, due to Covid restrictions.

Clothing is among the top categories of goods imported from China


A spokesperson for Primark told the BBC that "to date, we have managed to keep any disruption resulting from the lockdown in Shanghai to a minimum".

However, clothing and footwear prices in the UK rose 9.7% in the year to March 2022, according to the Office for National Statistics - with price rises due to global pressures on supply chains and energy costs, according to the UK Treasury.


Cleaning products


China is a major producer of chemicals used widely around the world, and major global chemical manufacturers have plants located in the Shanghai area.

For the UK, they represent the fifth biggest category of imports from China, and one of the most used chemicals is bleach.

There's not been a huge impact as yet on cleaning products in the UK


Some of the major industry players have said they've been able to keep factories open, but acknowledges they are not always operating at full capacity.

A spokesperson for Unilever, which makes brands such as Cif cleaning products and Domestos bleach, told the BBC that although the costs of raw materials were now at their highest for a decade, so far there has been relatively little impact from lockdowns in China.

Newsletter

Related Articles

0:00
0:00
Close
UK Prison Officer Sentenced for Inappropriate Conduct with Inmate
Good News: Senate Confirms Kash Patel as FBI Director
Officials from the U.S. and Hungary Engage in Talks on Economic Collaboration and Sanctions Strategy
James Bond Franchise Transitions to Amazon MGM Studios
Technology Giants Ramp Up Lobbying Initiatives Against Strict EU Regulations
Alibaba Exceeds Quarterly Projections Fueled by Growth in Cloud and AI
Tequila Sector Faces Surplus Crisis as Agave Prices Dive Sharply
Residents of Flintshire Mobile Home Park Grapple with Maintenance Issues and Uncertain Future
Ronan Keating Criticizes Irish Justice System Following Fatal Crash Involving His Brother
Gordon Ramsay's Lucky Cat Restaurant Faces Unprecedented Theft
Israeli Family Mourns Loss of Peace Advocate Oded Lifschitz as Body Returned from Gaza
Former UK Defense Chief Calls for Enhanced European Support for Ukraine
Pope Francis Admitted to Hospital in Rome Amid Rising Succession Speculation
Senate Republican Leader Mitch McConnell, at the age of 83, Declares His Retirement.
Whistleblower Reveals Whitehall’s Focus on Kabul Animal Airlift Amid Crisis
Politicians Who Deliberately Lie Could Face Removal from Office in Wales
Scottish Labour Faces Challenges Ahead of 2026 Holyrood Elections
Leftwing Activists Less Likely to Work with Political Rivals, Study Finds
Boris Johnson to Host 'An Evening with Boris Johnson' at Edinburgh's Usher Hall
Planned Change in British Citizenship Rules Faces First Legal Challenge
Northumberland Postal Worker Sentenced for Sexual Assaults During Deliveries
British Journalist Missing in Brazil for 11 Days
Tesco Fixes Website Glitch That Disrupted Online Grocery Orders
Amnesty International Critiques UK's Predictive Policing Practices
Burglar Jailed After Falling into Home-Made Trap in Blyth
Sellafield Nuclear Site Exits Special Measures for Physical Security Amid Ongoing Cybersecurity Concerns
Avian Influenza Impact on Seals in Norfolk: Four Deaths Confirmed
First Arrest Under Scotland's Abortion Clinic Buffer Zone Law Amidst International Controversy
Meghan Markle Rebrands Lifestyle Venture as 'As Ever' Ahead of Netflix Series Launch
Inter-Island Ferry Services Between Guernsey and Jersey Set to Expand
Significant Proportion of Cancer Patients in England and Wales Not Receiving Recommended Treatments
Final Consultation Launched for Vyrnwy Frankton Power Line Project
Drug Misuse Deaths in Scotland Rise by 12% in 2023
Failed £100 Million Cocaine Smuggling Operation in the Scottish Highlands
Central Cee Equals MOBO Awards Record; Bashy and Ayra Starr Among Top Honorees
EastEnders: Four Decades of Challenging Social Norms
Jonathan Bailey Channels 'Succession' in Bold Richard II Performance
Northern Ireland's First Astronaut Engages in Rigorous Spacewalk Training
Former Postman Sentenced for Series of Sexual Offences in Northumberland
Record Surge in Anti-Muslim Hate Crimes Across the UK in 2024
Omagh Bombing Inquiry Concludes Commemorative Hearings with Survivor Testimonies
UK Government Introduces 'Ronan's Law' to Combat Online Knife Sales to Minors
Metal Detectorists Unearth 15th-Century Coin Hoard in Scottish Borders
Woman Charged in 1978 Death of Five-Year-Old Girl in South London
Expanding Sinkhole in Godstone, Surrey, Forces Evacuations and Road Closures
Bangor University Announces Plans to Cut 200 Jobs Amid £15 Million Savings Target
British Journalist Charlotte Peet Reported Missing in Brazil
UK Inflation Rises to 3% in January Amid Higher Food Prices and School Fees
Starmer Defends Zelensky Amidst Trump's 'Dictator' Allegation
Zelensky Calls on World Leaders to Back Peace Efforts in Light of Strains with Trump
×