Massive flooding in China is set to have a huge impact on the supply chain in the Asian nation, as it affects distribution of everything from cars to coal, according to a report.Despite power and the travel infrastructure being restored in the country, the damage which has been caused by several days of downpour is continuing to cause trouble for the production and distribution of goods.
“As Zhengzhou is a top national transportation hub and Henan province is a major producer of grains, raw materials and some manufactured products like iPhones, we believe the rainfall and flooding will have a material impact on business activity and inflation in the short term,” Nomura analysts wrote, according to Reuters.
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Foxconn, the Zhengzhou company that produces iPhones for Apple, said so far there has been no impact on its production facility.
“We are closely monitoring the situation and will provide any updates as appropriate,” the company reportedly said.
But the outlet, citing an unnamed source familiar with the situation, also reported that a smaller Foxconn facility which produces desktop connectors in Zhengzhou had equipment damaged in the flooding.
And SAIC Motor, China’s largest car maker, warned of derailed logistics at its Zhengzhou plant, Reuters reported.
In addition to wreaking havoc on China’s supply chain in the short term, Reuters reported longer term the floods could affect farm output, since floodwaters can spread disease on farms.
The floods in China have left tens of thousands of people displaced after being evacuated and the death toll currently stands at 33, with at least eight people also missing.
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Meanwhile, Taiwan’s Central Weather Bureau issued a warning on Thursday, saying heavy rain will affect Taipei City and other northern parts of the island through Thursday night.
The storm is then expected to move on to the Chinese mainland, battering the financial hub of Shanghai and nearby provinces of Zhejiang, Fujian and Jiangsu with storms and gales, the China Meteorological Administration said.
This story originally appeared on the New York Post and is reproduced here with permission