Mainstream News Pumps Up Fear Porn Over the China Supply Chain Myth. Russia is Much More Integral to Supply Chains, Globally.

News fear porn journalism has flooded commerce news today. Specifically, establishment media have pushed the fear pedal to 10 over the recently announced lockdown of the city of Shenzhen by the Chinese government over an alleged outbreak of the coronavirus-2 omicron variant, commonly known as Covid-19 omicron.

Here are sample of headlines:

Are the Chinese Big Players in Supply Chains?

According to Investopedia, a supply chain is a network between a company and its suppliers to produce and distribute a specific product or service. The key bit there is about producing a product.

A quick look at exports from China reveals that Chinese primarily are exporters of finished products. Mostly, the Chinese export TVs, laptops, furniture, toys, fabrications of metal.

In other words, these Chinese, in the main, are not suppliers of inputs that form finished products. To claim otherwise is to distort reality and likely for political purposes.

Now, it is true that retailers such as Wal-Mart might be affected by what are Chinese final goods production disruptions. Yet, to call these "supply chain" problems is a big lie.

The Russia Disruption and Supply Chains

The idiotic sanctions imposed on Russia by the Biden and United States, the UK, the EU and Japan truly will interrupt supply chains. The Russians are exporters of raw materials mostly and raw materials are inputs in supply chains.

Many countries simply can not make stuff profitably without imported Russian inputs. A few big countries can not feed their people without imported Russian foodstuffs like Russian wheat. Egypt is a prime example of such countries.

Interestingly, the countries that have sanctioned Russia are most likely to be losers of imported Russian inputs.

At the time of this writing, the European Union leadership has failed to sanction Russian oil and natural gas, mostly from the reality of doing so would grind member countries to a halt.

Of the sanctioning countries, the biggest imports by percent that are supply chain inputs looks

Netherlands, crude and refined petroleum, 78.7% of imports
UK, gold, platinum, crude and refined petroleum, 87.37% of imports
Germany, crude and refined petroleum, coal briquettes, platinum, 74.84% of imports
Korea, crude and refined petroleum, coal briquettes, petroleum gas, 78.82% of imports
USA, platinum, crude and refined petroleum, radioactive chemicals, nitrogenous fertilizers, pig iron, 74.66% of imports
Italy, crude and refined petroleum, petroleum gas, 91.5% of imports

It is hard to see how Russians will be harmed by sanctions to the degree that politicians of the USA and its allies claim. Ex-oil and gas, Russians likely will find world buyers for Russian commodities now being offered on discount.