The effects of the COVID-19 coronavirus are going to hit the global economy hard, and leave China poor and looking like an incompetent fool. I have warned repeatedly that manufacturing (save for plastics and biomedical) is going to be very hard-hit, and that one should prepare for the situation right now by buying up tool-type things as one can get them.
Production issues are already showing around China and affecting the world, but the first major interruption has taken place as the car company Audi has been forced to stop production of electric vehicles due to battery shortages caused by the virus as Business Insider reports.
Production of Audi’s e-Tron electric SUV has been on pause since February 20 and will not resume until Tuesday, Bloomberg reports. The stoppage is to “resolve production issues” including bottlenecks in battery supply, the story said.
Bloomberg cited a company spokesperson in its report, who said Audi sold roughly 26,400 e-Trons last year but would not comment on estimated deliveries for 2020. Audi of America reported 5,369 in e-Tron sales in 2019, representing 2.4% of sales in the region. (source)
This is just the beginning of a much larger crisis.
Imagine what happens when critical car parts or other mechanical parts are unable to be purchased.
Most of the problems will appear towards the end of the year, and while there will be economic pain, the biggest loser will be China, who is going to be asked to “explain” herself, and likely result in a mass exodus of manufacturing from China into southeast Asia, India, and possibly even parts of Africa. The combination of economic problems and the social perception of China will at the very least isolate her from the entire world, and possibly could lead to her collapse.