Question

How has global exporting, importing, and global sourcing been affected by COVID-19?

give as much detail as possible

Answer 1

China has been essential to the global economy over the last two decades. The that role of China in the global economy is not solely linked to its position as a consumer product producer and exporter. China has been the largest supplier to manufacturing companies abroad for intermediate inputs. As of today, about 20% of world trade in intermediate manufacturing goods originates in China

Manufacturing in China is important for many global value chains, especially those related to precision instruments, machinery, automotive equipment, and communication devices.
Any major interruption in China's supply in these sectors is considered to impact producers in the rest of the world significantly. However, many businesses around the world are afraid that the measures placed in place to curb COVID-19 (i.e. restrictions on economic activity and people's movement) may impede Chinese manufacturers' supply of essential parts, thereby affecting their own production.

Reducing the supply of Chinese intermediate inputs will affect the productive capacity and thus the exports of any given country depending on how dependent its industries are on Chinese suppliers. Some European car manufacturers, for example, may face the scarcity of essential components for their operations, companies in Japan may find it difficult to procure parts needed to assemble digital cameras, and so on. The limited use of inventories provided by a lean and just-in-time manufacturing process would result in shortages for many companies that would affect their production capacity and overall exports.

Ven if the COVID-19 epidemic is largely confined within China, the fact that Chinese suppliers are important to many companies around the world ensures that any instability in China will also be felt beyond China's borders. Regional supply chains in Europe, the Americas and East Asia would be disrupted. The predicted global effects are subject to variability depending on virus containment and/or changes in supply sources.