China Travel Lockdown
Guangdong Province (aka Canton) is the most populous in the country and has the largest economy of all of China’s provinces. With over 100m residents and two of China’s largest cities, Guangzhou and Shenzhen, it is the world’s 4th largest sub economy and borders on Hong Kong and Macau. Panel producers LG Display (LPL), Sharp (6753.JP), Chinastar (vt), Tianma (000050.CH), and Royole (pvt) all have LCD or OLED fabs in the province and a myriad of other CE companies have manufacturing and assembly capacity as well, particularly in Guangzhou.
While China does not provide much transparency as to what percentage of the population has been vaccinated and what the cumulative infection rate has been, it seems that an outbreak of ~20 cases was discovered in Guangzhou on Sunday, with all of the cases being local, and while this is a very low number relative to many other countries, the Chinese government has ordered new travel restrictions on anyone leaving the province.
As of Monday morning the government cancelled many flights out of Guangzhou, the capital of the province, and began testing residents, with one neighborhood being told to stay at home and wait to be tested for the variant that has been spreading across India. That neighborhood also saw markets and schools shut down on Monday, and the entire city saw schools closed with the only exception being those in their final year of High School. Nearby cities of Foshan and Shenzhen have also begun a new round of mass testing.
Anyone leaving Guangzhou, which is 62% larger in population than New York City, is required to show a negative COVID-19 test taken within the last 72 hours, and anyone entering the entire country must quarantine for two weeks as the Central government tries to contain this latest outbreak. There are many that doubt the accuracy of China’s COVID-19 reporting, so a relative comparison to the US or other countries is hard to make, however the current rate of daily new infections in the US is 6,725, a far cry from one year ago when the number was 18,987. India has 126,698 new cases on May 31, although down from the peak of 414,433 new cases on May 6 of this year. China reported 23 new cases on that same day.
Hopefully these restrictions do not last long and would have a minimal influence on actual production in the province, but problems arise with logistics given that Shenzhen is China’s 3rd largest port and is only 17 miles from Hong Kong. Limited transportation from Shenzhen and Guangzhou could further exacerbated display panel shortages and drive panel prices higher should they be extended. China has been very aggressive about stemming any outbreaks, but without accurate or trustworthy vaccination data, it is hard to tell the impact of these local breakouts.
While China does not provide much transparency as to what percentage of the population has been vaccinated and what the cumulative infection rate has been, it seems that an outbreak of ~20 cases was discovered in Guangzhou on Sunday, with all of the cases being local, and while this is a very low number relative to many other countries, the Chinese government has ordered new travel restrictions on anyone leaving the province.
As of Monday morning the government cancelled many flights out of Guangzhou, the capital of the province, and began testing residents, with one neighborhood being told to stay at home and wait to be tested for the variant that has been spreading across India. That neighborhood also saw markets and schools shut down on Monday, and the entire city saw schools closed with the only exception being those in their final year of High School. Nearby cities of Foshan and Shenzhen have also begun a new round of mass testing.
Anyone leaving Guangzhou, which is 62% larger in population than New York City, is required to show a negative COVID-19 test taken within the last 72 hours, and anyone entering the entire country must quarantine for two weeks as the Central government tries to contain this latest outbreak. There are many that doubt the accuracy of China’s COVID-19 reporting, so a relative comparison to the US or other countries is hard to make, however the current rate of daily new infections in the US is 6,725, a far cry from one year ago when the number was 18,987. India has 126,698 new cases on May 31, although down from the peak of 414,433 new cases on May 6 of this year. China reported 23 new cases on that same day.
Hopefully these restrictions do not last long and would have a minimal influence on actual production in the province, but problems arise with logistics given that Shenzhen is China’s 3rd largest port and is only 17 miles from Hong Kong. Limited transportation from Shenzhen and Guangzhou could further exacerbated display panel shortages and drive panel prices higher should they be extended. China has been very aggressive about stemming any outbreaks, but without accurate or trustworthy vaccination data, it is hard to tell the impact of these local breakouts.
COVID-19 Daily New Cases - US & China - Source: Johns Hopkins University Case COVID-19 data
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