An exceptional, if not unique, correlation of factors is buffeting financial markets at the present, but we have enough experience to know how to respond and deal with these challenges. While most of the globe is emerging and recovering from the worst of the Covid pandemic, ironically, China has been hit by a resurgence of infections and has responded in its customary authoritarian manner. China’s economic and financial centre, Shanghai, has effectively been locked down in what constitutes the most extreme measures imposed on a major Chinese city. While the omniscience of the lockdown may prove effective in stabilising public health and eradicating this spike in Covid infections, its economic impact on the Chinese and global economy is alarming. Supply chain backlogs, silicon chip shortages and shipping blockages are just a few of the knock-on effects of the Shanghai lockdown. As the world’s major consumer of resources, the slow down in the Chinese economy will also dampen the resources super-cycle which has shielded our South African economy over the past couple of years. This interruption of the global recovery from the economic fall-out of the Covid pandemic comes at a time when advanced economies are grappling with exceptionally high inflation […]
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