General

Affected by the epidemic in Southeast Asia, global orders have flooded into China, causing factory power consumption to surge by 20.6%. Recently, the Chinese government has issued a dual-control environmental protection policy in order to force enterprises with “high investment, high energy consumption, and high emissions” to complete industrial upgrades, step out of the comfort zone, and avoid falling into a crisis.

Provinces named by the National Development and Reform Commission, such as Guangdong, Zhejiang, Jiangsu and other places, have introduced electricity curtailment measures to ensure that the dual energy consumption control targets can be completed in time.

At the same time, some European and American countries that rely on Asian manufacturing are also caught in the fear of inflation and supply chain tensions, and people are hoarding daily necessities.

Panic buying at Costco in the U.S.

The shelves of Costco, the largest chain of membership-based warehouse stores in the United States, are empty again. This panic buying wave stems from supply chain crises and soaring logistics costs.

Because it is precisely when American businesses are starting to rush for the holiday season at the end of the year, consumers are also preparing for the holiday, and they are going to the supermarket to grab shopping.

However, the soaring logistics cost and the crisis of the supply chain made the supply of goods in short supply. Unsurprisingly, the shelves were emptied.

In response to this supply chain crisis, the opener announced that it will re-impose purchase restrictions on daily necessities such as toilet paper, cleaning products and bottled water in the United States.

Sai Fed Chairman said prices are rising

Fed Chairman Powell said a few days ago: “The survey shows that American households believe that prices will rise in the short term.” Although the “short-term” is emphasized, in fact American households generally believe that prices will continue to rise.

Costco's chief financial officer referred to logistics costs as a "long-term inflation factor" on the earnings call. In addition, the combined effect of rising labor costs, increased product demand, and higher commodity prices has further intensified inflationary pressures.

"We can't bear all the pressure, and some of the pressure will inevitably be passed on to consumers." He predicts that the overall price increase of products sold by marketers will range from 3.5% to 4.5%.

Among them, the price of paper products for daily necessities increased by 4% to 8%, and the price of pet products increased by 5% to 11%. In addition, the market opener may raise the annual membership fee next year, an increase of about 8%.

And the problem that the company has to solve now is "commodity shortage." In order to alleviate the "commodity shortage", the opener will charter three oceangoing vessels to and from North America and Asia next year, but this measure may be far from solving the immediate supply chain crisis.

Panic buying in British supermarkets

At the same time, the UK is also facing a "rush to buy boom."

Affected by factors such as rising energy prices, Brexit, labor shortages, insufficient truck drivers, increased inflation expectations and other factors, the supply chain is tight, commodity shortages, and the supply of beverages and meat in British supermarkets are tight, and British residents have panic buying Panic buying has erupted in British supermarkets, and the shelves have been sold out.

This phenomenon will in turn increase the level of inflation in the UK.

Data from the Bank of England showed that the 12-month average CPI inflation rose from 2.0% in July to 3.2% in August, a 9-year high.

If inflation continues to stay at a high level in the medium term, even if the Bank of England has lowered its third-quarter economic growth forecast from 2.9% to 2.1%, the British economy will have problems.

Many countries around the world are facing inflationary pressures

In fact, the developed economies around the world have generally faced inflationary pressures.

The Eurozone has also been involved in this turmoil.

The shortage of energy supply in the Eurozone has also led to a significant increase in inflation. The skyrocketing price of natural gas and other energy sources has led to a sharp rise in electricity prices, and a number of European companies have been forced to cut production and stop production, which has led to the European supply chain not being optimistic.

The OECD (Organization for Economic Cooperation and Development) predicts that the Eurozone inflation rate is expected to hit a record high in the fourth quarter of this year.

In addition to the aforementioned United States, United Kingdom, and Eurozone, the current inflationary pressures in Russia, Brazil, India, Turkey, South Korea, New Zealand, Malaysia, Thailand and other countries are very serious.