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China Finds Omicron in Another Port City, Further Threatening Supply Chains -Breaking

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© Reuters. China finds Omicron in Another Port City. This Threatens Supply Chains

(Bloomberg) — China detected omicron in a second major port city, deepening concern of a wider outbreak at Beijing’s doorstep and raising the prospect that more foreign businesses might follow Toyota Motor Corp. in halting operation along the northeastern coastline

Officials in China announced Thursday that at most one individual has the transmissible variant of omicron. This is a seven-million population city. Although the patient did not show any symptoms, they tested positive when returning to their Tianjin college, which had at least 137 cases as of Wednesday. Another person from Dalian tested positive for the virus but is not yet known.

As the second port crucial with confirmed cases of omicron, Dalian is joined by Tianjin. The ports have a combined processing capacity of approximately 25 million TEU and are major production centers for international companies, such as Airbus (DE:). Ships are headed for Shanghai amid delays caused by Covid near Beijing, and other factors. This is causing increasing congestion and delay schedules for container ship arrivals of around a week according to freight forwarders. These delays may spread as far as Europe and the U.S.

China should be concerned about the spread of omicron. With just three weeks to go before the winter Olympics are set to begin in Beijing, China has put in place some of the world’s toughest measures to stamp out the virus. After dozens of positive tests, officials in Tianjin shut down schools and restaurants as well as entertainment venues. Travel is now more or less stopped. 

Toyota’s joint-venture plant in Tianjin was shut down this week as the city intensified mass testing. This is a town of approximately 13 million. Other companies may also follow their lead. Japanese companies also include Sony Dalian is home to both (NYSE:) Group Corp. (OTC:) Corp., and Panasonic (OTC.:) Corp.

China’s National Health Commission said 124 locally transmitted cases were found on Thursday, including 41 in Tianjin, where the omicron variant was first identified, and 76 in nearby Henan province. According to health officials, nine other domestic cases, which include two from Dalian, were also found with asymptomatic infection.

Beijing also orders residents to remain put, as it is only 30 minutes away by train from Tianjin and just a couple hours from Dalian. With the Olympics and Chinese New Year drawing closer, people have been encouraged to spend the holidays at home, the city’s presser said in late December, though it is still unclear if developments in Dalian will change the calculus.

©2022 Bloomberg L.P.

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