CoronaVirus ==> Empty Shelves

[GraemeCook]

Have just been reading about the disruptive effects of the CoranaVirus in China. Over 2,000 diagnosed deaths, and the government is almost closing down the economy to fight the epidemic. All factories within 200 kms of Wuhan have been closed, many factories outside that area have chosen to close, public transport severely restricted, people who went back to the village for New Year cannot return to work, exports essentially banned, .... The list is long.

With JIT (Just In Time) warehousing practices being the norm, what will be the effect on Western retailers? Will we be greeted by emptying shelves when we walk into Bunnings, Mitre10, Carbatec, Myer, Harvey Norman, K-Mart, Repco, etc? They all source most of their stock from China and the supply line has stopped.

Graeme

[RossM]

Most goods come via bluewater freight - 3 - 4 weeks. So therewould have been goods in transit. I suspect we may start to see some shortages in some areas over the next few weeks. I see recent reports that shipyards throughout China have been impacted, so its not just manufacturing.

I suspect that retailers will be scrambling to find alternate sources of supply - Thailand, Phillipines, Cambodia, Bangladesh have opportunity to fill gaps. It may not be as noticeable in the chain stores as they can substitute products. However if your looking for specific items then I think it may become noticeable over the next month or two.

[PJM16]

My parents have already been affected. Tried to have a replacement air conditioner ordered for their caravan and no go. No indication of when it'll be available either.

[BobL]

Our solar PV installer said they aleady don't have supplies of some panels and he he only can get supplies of others for another couple of weeks worth of installs. Then he can take a much needed holiday and then he's in trouble. But tourism is already badly affected. OTOH more cruise ships are now headed to WA so that will help a bit.

[Handyjack]

Yellow Octopus expects supply problems in a couple of months.
One furniture retailer is looking to Vietnam.

Unfortunately Australia does not have the manufacturing industry it once had.

[PJM16]

I think it shows where the problem is with globalisation.

[thumbsucker]

A company I order Jewellery tools for school cannot fill my full order at this time saying that stuff is not being shipped or is stuck in customs due to the virus.

Globalisation has been with us for thousands of years with specific international trade relationships going back 5000 plus years.



Thomas the Apostle was sent to India at the death of Jesus to minster and convert a Jewish community in Goa India 2000 years ago. The Jewish community existed as part of a global trade arrangements between India, China and the Middle East with arrangements with Southern European merchants AKA globalisation. The apocryphal accounts of Thomas and his relationship to Jesus has an even more amazing account of why he ended up in India.

Look at all the Jewish, Chinese & Indian diaspora's around the world communities that go back thousands of years again because globalisation. They are all products of the evolution of globalisation over time.

In the Prophetic Sayings of the Prophet of Islam (Muhammad) Peace be upon him says "Seek knowledge even as far as China". Muhammad was a skilled trader from a powerful trading family from Mecca, he travelled to Jerusalem and Damascus, and would have had direct contact with traders bringing goods out of China. This is why vast areas of China have Muslims who travelled for trade and knowledge to China over 1200 years ago, This is why Indonesia is a Muslim majority country with Christian and Hindus communities again all because of globalisation.

My own blood comes from Globalisation. In 1652 the Dutch East India Company established a settlements at the Cape of Good Hope (South Africa). Some of my ancestors were early Dutch traders to the Cape. Then I have English ancestors from London (Southbanks) and German ancestors who came to South African in the 18th/19th century. Other parts of my ancestors came from Dutch Malacca controlled by the Dutch East India Company between 1641 to 1824 (Modern Malaysia) settling in the Cape and in time became the Cape Malay Muslim community. Then their is my Bantu ancestors who are part of greatest migration in history spanning 4,000 to 3,000 years ago starting in West/Central Africa (the area of modern-day Cameroon). All of this is just from my mothers side that I have been able to reconstruct. All of these people moved willing or otherwise due to globalisation. In appearance I am a Cape Coloured a product of globalisation. I like to think that a person like me haunts Donald Trumps nightmares.

On my father Swiss German side our family name is rooted in international military campaigns (Reisläufer). Were the Swiss would sell their skills as mercenaries to the different European powers (starting in the Late Middle Ages) all in the quest for profit, power and money all over the world. There is a memorial in Central Africa dedicated to war crimes committed by Swiss mercenaries. I laugh when people stereotype Swiss as neutral chocolate eating clock makers. We are a violent people and our hands are soaked in blood thanks to globalisation. I would not have it any other way.

Look at the history of Australia, at no point in its history was Australia ever self sufficient. Going back thousands of years Aborigines traded with Indonesians, who then told European merchants (who were trading, buying & selling thanks to globalisation in South East Asia) of a Southern Land that eventually lead to Captain Cook. That made Australia dependent on UK and Europe and today globalisation means we are closer to Asia, and yes we need them and guess what they need us.

People who wish to end globalisation would regret it if they ever had to live a single minute in an de-globalised world. Look around you, open your eyes to everything that surrounds you everything exists because of globalisation. There are always winners and losers and the anti-globalisation rabble are just whingeing because do not like the fact that their mob is currently loosing in the game of globalisation. Without globalisation they would be sitting on a mud floor and not even being able to cover their shame with a rag.

[crowie]

Apologies Graeme...
BUT the Aussie wit or black humour has also struct on this awful issue...

Corona Bug.jpg Corona Virus - Rusty Corona.jpg

[BobL]

I agree, it's a bit too easy to blame "globalisation" , including by many that willing take advantage of it.
Perhaps the underlying cause is "greed"? or another way to look at it is, "looking for a good deal" or "a way to cut costs".

[GraemeCook]

I think it shows where the problem is with globalisation.

I thought the problem was the reverse of globalisation - China-isation, if you will - or the absense of diversity in the source of supply. Rarely a good idea to put all your eggs in one basket!

[BobL]

I thought the problem was the reverse of globalisation - China-isation, if you will - or the absense of diversity in the source of supply. Rarely a good idea to put all your eggs in one basket!

I agree about the eggs in one basket.

Globalisation is sourcing out to the cheapest producer/supplier of eg clothing, energy, construction, food, services, IT, motor vehicles, movies, music, financial services, health, electronics, mining etc. The fact that for many of these it turns out to be China is the way is just how its worked out.

There's "cost" and then there's "quality", (or at least perceived quality) eg they definitely want our milk powder, education experience, and crayfish

[elanjacobs]

Unfortunately Australia does not have the manufacturing industry it once had.

Because we have a small population, relatively isolated from the rest of the world (and ourselves, given the distances between population centres), with a high cost of living and high wages.

Mass production and low-value production in this country are gone and they're not coming back. It's time we all come to peace with that.

[BobL]

Reuter’s reported just now that major Chinese shipping companies are starting shipping later next week or early the week after so you shouldn’t have to wait for your widgets much longer

[Glider]

Because we have a small population, relatively isolated from the rest of the world (and ourselves, given the distances between population centres), with a high cost of living and high wages.

Mass production and low-value production in this country are gone and they're not coming back. It's time we all come to peace with that.

I don't think we ever had low value production in a broad spectrum. Protective tariffs of 40% were quite common when I left the lab in the early 70s. Products and industries with low physical volume and labour content and particularly those with unique technology survived. Ross Garnaut is quite right in saying that we CAN regain our competitive edge if we harness cheap power in all its forms. To do so, we'll need it nationalised which the neo-conservative will never allow.

mick

[elanjacobs]

Power could be free and we still won't be competitive when production workers here are earning in a few hours what their Asian counterparts make in a week.