The Impact of COVID-19 on China and Manufacturing

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It has been said countless times but continues to be true: we are living in unprecedented times amid COVID-19.  COVID-19 has impacted the world in various ways, but those who engage in manufacturing in China know first-hand how long this pandemic has been impacting their business.  Consumers who never thought about offshore manufacturing are now more acutely aware than ever how impactful changes in the abilities of Chinese factories can affect their access to the products they need.

The Beginning

COVID-19 in China
Figure 1: Timeline of Lockdown in China

In December of 2019, most of the world was not aware that hospitals and medical clinics were starting to fill with patients who were falling ill from a then-unknown disease.   Yet, the area right around Wuhan, China was starting to buzz with concern about what seemed like an upper respiratory infection that was causing many to fall ill.  As the apparent virus spread, many factories were finding they were short-staffed, so production was not as efficient as it had been.

While many in the United States and other countries who rely on Chinese manufacturing weren’t yet aware of an impending issue, the impact of what would become known as the COVID-19 virus was going to be felt soon.  Because of the fast spread of the virus, China locked down entirely starting on January 23, 2020, for 76 days.

The Impact of Lockdown

Because China is one of the top manufacturing hubs of the world and so many were being infected with COVID-19, businesses around the world were prepared for a disruption in the supply chain.  China is known to be a manufacturing powerhouse, with more than 30% of the country’s income coming from manufacturing.  Because of the lockdown, many factories simply were not able to function. Those that were in areas that did allow for work were hit hard by a lack of employees.  Many employees were infected with COVID-19 so they could not come to work.  Others were not infected but were fearful of being infected so they did not attend work as usual.

The result?  Factories simply could not manufacture products at the speed required to keep up with the demand.  Slowly, businesses were finding they could not stock their shelves to meet demand.

Supply Chain Disruption

When the lockdown was announced in January, it was clear there would be an impact on the manufacturing industry in China but no one was prepared for the hit that many industries would take.

COVID-19 Supply Chain Disruption
Figure 2: Impact of COVID-19 on Manufacturing In China

Because Wuhan is the automotive manufacturing hub of China, it comes as no surprise that the automotive industry was hit very hard.  Yet, the widespread and lengthy lockdowns had a significant impact on all industries.  In areas where factories were able to continue work, they often could not complete work because raw goods from other parts of the country were not accessible.

After the initial 76-day lockdown, many factories could not simply return to full capacity and work as efficiently as they had pre-COVID-19.  Social distancing measures were in place and there was a backlog of work.  A limited workforce, as well as continued issues with access to raw goods, created a continued slow down in factories.

These issues in the factories in China were felt the world over.  Businesses that rely on manufacturing in China were unable to stock their goods and the consumers who shop these goods were not able to access the goods they needed.  This disruption in the supply chain gave consumers worldwide an understanding of how the supply chain works and another level of appreciation for the impacts of a global pandemic.

Future Impact of COVID-19 on Manufacturing

As 2020 came to a close, most factory owners, workers, business owners, and consumers hoped the door was closing on COVID-19.  Yet, in January, China was forced to order another round of lockdowns due to their worst outbreak of new cases of Coronavirus since the summer of 2020.  More than 22 million were ordered to stay home, more than double the number of people who were forced to quarantine to stop the spread of the virus initially.  It is not yet known how this latest lockdown will impact access to raw goods or manufacturing in China.

The good news is that even in the face of new lockdowns, we have all learned more about how to handle shutdowns and the reopening of business.  There is more tolerance and understanding on the part of business owners and consumers.  So, while this is not ideal, there is an understanding that lockdowns are necessary and will allow us to put COVID behind us sooner rather than later.

We all hope and expect manufacturing will not be further impacted by COVID-19.  China, as other countries, has begun vaccinating its citizens free of charge.  As more people are vaccinated the spread of the virus should slow with the goal of ‘herd immunity”.  As the theory goes, while the virus will still be in the environment, the spread will lessen and those who do get it will not be as ill.  This will allow for manufacturing and daily life in China and the rest of the world to return to a state of pre-COVID normalcy.  No “new normal” here.  The disruption in the supply chain should correct itself and eventually this unprecedented time in manufacturing and everyday living will eventually a distant memory.

ITI Manufacturing Can Help

Interested in moving your manufacturing offshore but aren’t sure how to get started?  Are you worried about the impact of COVID on your business when you manufacture in China?  Offshore manufacturing not going as expected?  Too many issues?  ITI Manufacturing helps you succeed with customized offshore manufacturing.

With more than 30 years in offshore manufacturing, we have perfected our offshore manufacturing services.  We want you to experience what it is like to have an offshore manufacturing partner that watches out for your best interest, advises you, manages all of the offshore supply chain, and guarantees no manufacturing defects.  We are proud to have a full-time, dedicated staff on the ground in China with strong factory relationships with factories that, like us, understand that “it’s good enough” is not what American businesses and consumers want.

We understand and respect the Chinese culture and communicate with factories on your behalf in a way that transfers the understanding of what our customers need.  We do whatever it takes to choose the right factory, that manufacturing is done right the first time, and logistics are arraigned as efficiently and economically as possible.  Pandemic or no pandemic.

ITI Manufacturing’s approach allows you to do what you do best: run your business.  While you run your business, our service-based, USA-based staff keeps you informed along the way with as much or as little detail as you would like.  Every customer is different just like every product is different.  What remains the same is ITI Manufacturing’s dedication to customer service and support.  Do you want to learn more about how we do this?  Schedule a free, no-obligation consultation now! Experience what working with a world-class offshore manufacturing management company is all about.