As a result, goods in China are immobilized right now. According to Richard Martin (business consultant), this could pose a problem for the world economy.

Martin, managing director of IMA Asia told CNBC that many things we use all around the globe are manufactured from components made in China. “We’re about see a logistic snarl which’ll dwarf any other thing in 2020 or 2021,” Martin said.Street Signs Asia” Tuesday.

China accounts for 20 percent of world demand. However, its contribution to supply chains and markets is far greater than this.

Since the early months of the pandemic, the global economy has struggled with supply chain challenges due to a mix of factors — such as logistics services struggling to keep up with trade volume, or Covid surges in parts of Asia that threatened to disrupt the flow of goods.

After Russia invaded Ukraine in February, the war in Ukraine broke out. further fueled those concerns.

“The outlook you’ve got for the global economy is getting pretty dim now — Europe faces a war on its doorstepUnited States of America has all the advantages. big interest rate hikes coming throughMartin stated that they could have a negative impact on the U.S. consumer as well as in China.

China has been fighting its own economy for the past few weeks. most severe Covid outbreak on the mainland since the initial shock of the pandemic in early 2020.

Rob Subbaraman is the chief economist at Nomura and heads global markets Research for Asia ex Japan.

Referring to Nomura’s survey on the extent of the lockdowns across China, he said: “If we look at provinces where there’s partial or full lockdowns we estimate it covers around 40% … of China’s GDP.”

Shanghai was one of the hardest-hit areas. Local authorities have put strict restrictions on travel and imposed stay-home rules. Although the infection rate is starting to decline, Jilin in northern China, which houses many auto factories, was also severely affected.

“The problem Beijing has got is right across the country — not just Shanghai but down in the south in Guangzhou and of course, up in Jilin where there’s been a lot of manufacturing,” Martin said.

He added that the fear of Beijing punishing local officials if Covid is detected in their territory has led to them closing down entire cities.

Subbaraman indicated that disruptions in supply are taking place at an increasingly fast pace right now. Subbaraman said that while we believe China’s retail sales may plummet in March, China appears extremely weak and needs to receive more stimulus.

China adopted an aggressive zero-Covid strategy since the outbreak. It has imposed strict restrictions on travel and other activities as a result of being infected. Its global counterparts have, however, shifted to living on Covid and are opening their borders for international travel.

“You can’t see President Xi Jinping retreating.” [China’s]Martin stated, “Zero-Covid policy has almost become a hallmark for the administration.”

He warned that while China will eventually be able to stop the Covid epidemics that have resulted from the transmissible Omicron variant of the virus, this may come at the cost of an economic slowdown.

— CNBC’s Evelyn Cheng contributed to this report;.