Effects of the SARS-Cov-2 pandemic into the China-EU trade: geographical and economical alternatives

Effects of the SARS-Cov-2 pandemic into the China-EU trade: geographical and economical alternatives Pàg. 1 Bachelor’s Degree Final Thesis Bachelor’s Degree in Industrial Technologies and Economic Analysis (IT&EA) Effects of the SARS-Cov-2 pandemic into the China-EU trade: geographical and economical alternatives MAIN TEXT Author: Gerard Rodrigo Corominas Director: Iñaki Gras Basañez Call: June 2022 Escola Tècnica Superior d’Enginyeria Industrial de Barcelona Pág. 2 Main Text Effects of the SARS-Cov-2 pandemic into the China-EU trade: geographical and economical alternatives Pàg. 3 SUMMARY The main objectives of this project are to analyse how the SARS-CoV2 has affected the industries in the different parts of the world, which is the forecast for the following months and to see if in the long term it is possible to perform a relocation of the supply chain in order to reduce the dependence of the western world on the Chinese production and the fragility against unpredictable events. First of all, the pre-pandemic context has been analysed to see how the supply chains were and to assess how strong is the dependence of the EU in the Chinese industry. Secondly, the macroeconomic effects of the pandemic have been looked into, and it will be seen if the countries pre-pandemic positions changed. In the third place, the effects that the final consumers suffered have been quantified. Then, a more particular view will be taken analysing the effects of the pandemic in four cases of Catalan companies of different industrial sectors. As the final part of the project, the focus has been placed in the future both in the short and long term. First, a short-term vision has been taken to see which is the forecast for production and costs for the remaining part of 2022 and 2023. Then, a more long-term look has been taken to analyse if there are real alternatives to China that can handle the scale of production of China in a way that offers less costs or reduced unpredictability. Pág. 4 Main Text Table of Contents SUMMARY___________________________________________________ 3 TABLE OF CONTENTS _________________________________________ 4 1. GLOSSARY ______________________________________________ 6 2. PREFACE ________________________________________________ 8 3. INTRODUCTION ___________________________________________ 9 3.1. Objectives of the project ................................................................................... 10 3.2. Scope of the project ......................................................................................... 10 4. PRE-PANDEMIC TRADE CONTEXT __________________________ 11 4.1. EU-China Trade Relations ............................................................................... 11 4.2. A look at the EU-China trade numbers ............................................................. 12 4.3. How business is made: shipping companies .................................................... 15 4.4. Belt Road Initiative ........................................................................................... 17 4.5. Political Conflicts and Interests ........................................................................ 20 5. EFFECTS OF THE SARS-COV-2 PANDEMIC __________________ 22 5.1. Effects on China’s Industry .............................................................................. 22 5.2. Effects on Container Shipping .......................................................................... 25 5.3. Effects on Spain’s Industry ............................................................................... 27 5.4. Results on Trade Numbers .............................................................................. 30 6. EFFECTS ON THE FINAL CONSUMERS ______________________ 33 6.1. Temporary Causes .......................................................................................... 34 6.2. Systematic Causes .......................................................................................... 36 7. EFFECTS OF THE PANDEMIC ON THE CATALAN INDUSTRY ____ 41 7.1. DOGA Group ................................................................................................... 41 7.2. Easy Chemical SL ............................................................................................ 43 7.3. QEV Technologies ........................................................................................... 46 7.4. Electrical Material Multinational Case Study .................................................... 49 8. FORECAST OF THE SECOND HALF OF 2022 AND 2023 _________ 55 9. ALTERNATIVES TO PRODUCING IN CHINA ___________________ 58 9.1. Geographical alternatives to producing in China .............................................. 58 9.1.1. Factors to consider in candidate countries ....................................................... 58 9.1.2. Geographical alternatives in Asia/Pacific ......................................................... 58 Effects of the SARS-Cov-2 pandemic into the China-EU trade: geographical and economical alternatives Pàg. 5 9.1.3. Geographical alternatives in America .............................................................. 59 9.1.4. Geographical alternatives in Europe ............................................................... 59 9.1.5. Climate Change as a factor ............................................................................. 60 9.1.6. Difficulties of moving away from China............................................................ 60 9.2. Planning alternatives to producing in China .................................................... 62 10. ECONOMIC STUDY _______________________________________ 64 CONCLUSIONS ______________________________________________ 67 ACKNOWLEDGMENTS ________________________________________ 69 BIBLIOGRAPHY ______________________________________________ 70 Pág. 6 Main Text 1. Glossary ·Belt and Road Initiative (BRI): Long-term development plan made by China to create infrastructures and invest in the countries that are located in the trade routes that connect China with the rest of the world in order to improve trade and solidify its role as the world’s factory. ·Comprehensive Agreement on Investment (CAI): Historic agreement between the EU and China that levelled the playing field in the trade between the EU and China and made European companies gain certainty and predictability in their business in China. ·Consumer Price Index (CPI): economic index representing the average change over a period of time (normally one year) in the prices paid by urban consumers for a market basket of consumer goods and services. ·European Central Bank (ECB): central bank of the European Union that dictates the monetary policy followed in the countries of the Eurozone. ·Expediente de Regulación Temporal de Empleo (ERTE): special type of legal procedure in which a company going through an exceptional situation asks to the authorities to suspend totally or partially the contracts of their workers temporarily without firing them permanently. ·Gross Domestic Product (GDP): Standard measure of the value added created in a country during a certain period of time through the production of goods and services. ·Gross Value Added: Standard measure of the value that producers have added to the producers and services they have bought. ·Net income: profit that a company makes defined as total revenue minus total business costs. ·Net (profit) margin: margin that a company gets from the products it sells defined as (total revenue – total business costs) / total revenue. ·Perfect substitutes: two objects for sell that are seen as identical by the consumer and, therefore, the consumer will pick the cheapest one. An example would be two bottles of water of different brands but with the same characteristics (assuming that the consumer doesn’t have preference between brands). ·Twenty-foot equivalent unit (TEU): standard unit of container used for transporting cargo characteristic for its length of 20 foot (6.1 meters). Usually completed by a width of 2.44 m Effects of the SARS-Cov-2 pandemic into the China-EU trade: geographical and economical alternatives Pàg. 7 and a height of 2.59 m it yields a capacity of 33.2 m3. ·World Trade Organization (WTO): Intergovernmental organization that regulates and facilitates the trade between countries. It has 164 member states that account for 98% of global trade and global GDP (Gross Domestic Product). Pág. 8 Main Text 2. Preface After the months of confinement that occurred during the year 2020 because of the SARS- CoV2 Pandemic, people started noticing an increase in the price of almost every product in their life. This event was the consequence of a lot of factors that came into play in the ultraconnected world where we live in. For instance, a friend of the family and golf peer of the author’s father complained that he was finding difficulties to bring supplies from China for the company where he works in, since the price of the containers where the products are loaded had spiked during those months. If we understand the economic world as a mechanism that connects companies all over the globe in order to produce something, problems in one of the gears (each one of the companies involved) or in the gear teeth that connect them (which would be the transporting companies), start to drag along the whole system making it impossible for the ensemble to work properly. Therefore, the difficulties that are found by the companies’ doing business outside of their home country, must be understood as a problem of the whole society, since one way or another, everyone will be affected. This project titled EFFECTS OF THE PANDEMIC INTO THE CHINA-EU TRADE: GEOGRAPHICAL AND ECONOMICAL ALTERNATIVES will try to analyse what happened during that period, how it still affects us and to think if relocating some of the steps of the world’s supply chain would lead to a more robust system that is more capable to resist future problems that could affect either some countries in particular or the world as a whole. Effects of the SARS-Cov-2 pandemic into the China-EU trade: geographical and economical alternatives Pàg. 9 3. Introduction During the last months of 2019, a new type of virus called SARS-CoV-2 appeared in an outbreak in the Chinese city of Wuhan. Although during recent history several viruses with the potential of causing a pandemic had appeared, they always ended up becoming controlled sooner or later. This wasn’t the case for SARS-CoV-2, which exceeded all expectations and became the biggest pandemic since the Spanish flu of 1918. The spread became so large that it paralyzed the world forcing people to be confined all over the world. As of March 1st 2022, the pandemic had 440 million registered cases and 6 million deaths [1]. Regarding factories all over the world, logically the first to be affected were the ones located in China, but as the virus spread to the other continents, everything started falling apart. The confinements of the population that most countries applied minimized the production, but people stuck home wanted to get distracted and/or work remotely so they kept buying things with special incidence in technological devices. Furthermore, the whole world started demanding lots of medical supplies that were related to personal protection against the virus. The jewel of the crown of this demand movement were the facemasks, one product that was very residual before the pandemic and that now was suddenly needed by everyone. This demand of products was mainly answered by the same China where the virus had started, more severe measures and more strict controls of the population than in western countries made possible that factories started producing again while the rest of the world still tottered. The fact that China was being able to start producing again while western countries were still paralyzed, brought another problem with it. Usually, international commerce is reciprocal, even though it is true that China is the factory of the world, the other countries also export their own products to China which range from luxury items to alimentary products. This two-way traffic generates a flow of containers that come filled with manufactured goods from China, unload their products and return with some other goods to the origin. One way of the trip is paid by one company (the one importing from China) and the other way is paid by another company (the one exporting to China). The problem that appeared was that these containers now came from China filled with medical equipment, but they didn’t have anything produced in the west to return to China, so either they got stuck here or companies had to pay the round trip for the same container. Moreover, the containers faced extremely important delays at customs because a lot of workers couldn’t go to work and a reduction in the warehouse workers and truck drivers that had to complete the final part of deliveries. All the above made transportation costs to increase dramatically for companies that had to either increase prices or cut into their profits. All these problems weren’t solved instantaneously and even though time has passed, and Pàg. 16 Main Text companies is that, in order to reduce costs, they are taking steps to having bigger ships every time instead of having more of them. This implies that these ships cannot make stops in their routes in any port, they must moor in commercial ports specially prepared for them. In this sense, the Taiwanese Evergreen Marine Corporation ordered in 2021 five ships with a capacity of 23,992 TEU each, which made them the biggest container ships ever. Figure 4.3.2 Ever Ace container ship (the largest container ship ever made) The function of the mentioned ships is to connect eastern Asia with Europe and America, in order to do this, they use some of the most transited maritime routes [7] such as the Suez Canal, the Panama Canal and the English Channel. Regarding the ports that receive the departure and arrival of these ships it’s important to note that China tends to have bigger ports in capacity with respect to those ports located in Europe or America [8] which tend to be more diversified. In this way, 7 of the 10 biggest commercial ports are located in China. Of important mention are the Shanghai port (#1 port worldwide), the Singapore port (#2 port worldwide) the Rotterdam port (#10 port worldwide, #1 in Europe) and the Los Angeles port (#17 port worldwide, #1 in America). It’s important that these ports have the infrastructure necessary for these ships because, as it was said, they have special necessities in order to be moored and they must be unloaded quickly in order to continue their routes. Regarding the unloading of a ship, it is expected for a ship containing around 10,000 TEUs to stay in a port in between 1 and 3 days to unload the required cargo. Also, it’s important to keep in mind that the transport structure doesn’t end there, it needs a continuation on land that requires logistic centres where the containers are placed in trucks and trains in order to reach the next step of their individual journey. This generates an important business with a considerable number of workplaces at stake. An example of this is that Maersk has projected to create a new logistic centre in the Barcelona port [9] that will manage around 18,000 containers and will create 80 workplaces. But this is only a small Effects of the SARS-Cov-2 pandemic into the China-EU trade: geographical and economical alternatives Pàg. 17 part, if we consider the whole picture of Port de Barcelona [10], 37,300 people were working there in 2020 making it one of the most important pillars of the Catalan economy. 4.4. Belt Road Initiative As it has already been discussed, in the last decades China has risen to the status of superpower economically and politically offering the alternative to the leading role of the USA in the western countries. According to their new status and world’s view, China has interests in increasing their foreign presence economically but also culturally. Therefore, foreign policies have become a centrepiece of President Xi Jinping’s governance. Responding to these interests, the People’s Republic of China started a long-term strategy in 2013 called the Belt Road Initiative (officially Silk Road Economic Belt and 21st-Century Maritime Silk Road Development Strategy, usually shortened as BRI) that plans to invest in infrastructures in over 70 different countries spending billions of USD each year to improve the commercial routes that connect China with their customers. This megastructure is expected to show the world China’s relevance and to consolidate China’s role as the factory of the world for the long-term future. The completion of the project is forecasted in 2049 as a celebration of the 100 years of the victory of Mao Zedong and the consequent proclamation of the People’s Republic of China. The Belt Road Initiative is conformed of 6 major land routes (which have the name of Economic Corridors) and 2 maritime routes [11]: · New Eurasia Land Bridge Economic Corridor (NELBEC): Would connect West China with Germany going through Russia and Poland. · China-Mongolia-Russia Economic Corridor (CMREC) · China-Central Asia-West Asia Economic Corridor (CCWAEC): Would connect China with Turkey through Pakistan. · China-Indochina Peninsula Economic Corridor (CICPEC): Would connect Southern China with Singapore, another leading actor in Asia. · Bangladesh-China-India-Myanmar Economic Corridor (BCIMEC). · China-Pakistan Economic Corridor (CPEC) · 21st Century Maritime Silk Road: This is the already existing maritime route that use most of the container ships that bring supplies from China to Europe. If the infrastructures were to be improved the traffic using this route could win even more importance shaping the future of the world’s economy. Pàg. 18 Main Text · Polar Silk Road: The other maritime route would connect China with Europe using the artic waters controlled by Russia. If this route was to be developed fully, it could compete easily with the 21st Century Maritime Silk Road because it would reduce a lot the time of travel by sea in between China and the countries in the north coast of Europe such as Germany. Figure 4.4.1. BRI map of connections (Source: Belt and Road Initiative) As mentioned by the World Bank [12], this ambitious project has the potential to increase world’s trade between 2.7% and 9.7% and lift 7.6 million from extreme poverty (mostly from countries such as Bangladesh and Pakistan that would benefit from the investments). Also, these investments would be very good news for the western industries since travel times would be reduced by an expected 12% with the consequential reduction in costs. In order to start developing the project, China has already started doing business in some of the affected countries. The following table [13] shows the most benefited countries in between 2014 and 2018. It’s important to note the difference between what is under construction (but doesn’t imply property of assets), principally power plants and roads and railroads in under-developed countries with large amounts of population, and where China is directly investing, which consist of richer economies where money can be made. Effects of the SARS-Cov-2 pandemic into the China-EU trade: geographical and economical alternatives Pàg. 19 Construction Investment 1. Pakistan 31.9 1. Singapore 24.3 2. Nigeria 23.2 2. Malaysia 14.1 3. Bangladesh 17.5 3. Russian Federation 10.4 4. Indonesia 16.8 4. Indonesia 9.4 5. Malaysia 15.8 5. South Korea 8.1 Table 4.4.1: Money spent by the BRI in the 2014-2018 period in billions USD (Source: China Global Investment Tracker) The countries that oppose the idea of the BRI for political, economic and influential reasons (mainly USA, Japan and Australia) remark that these numbers are used as propaganda often inflating the figures and that the construction of infrastructures over whom China doesn’t hold property won’t have much effect for the future world economy. Also, they highlight the slow process of the project that would take until 2040 to reach the goal of 1 trillion of USD spent in investment that is often mentioned. On the other hand, the countries that are profiting from the investment are receiving the project with enthusiasm. Among these countries there are political allies like Russia, countries in development such as Indonesia but also some European members such as Poland or Italy. A special case among these is India, which is favoured by the project but is worried about the gain of relevance of their neighbour and traditional enemy Pakistan. Regarding the European Union role, they are concerned about the possible gain in influence by China over the affected countries, but they tried to come up with their own Trans- European transport network [14] and it became too costly. Also, any action against BRI is heavily opposed by the members of the EU that benefit directly from the investments and by the industrial sector that would profit by the completion of the project. Finally, another controversial point is how the initiative would affect climate change. In 2016, China entered the Paris Agreement that set the objective of remaining on a level of emissions that would cause an increase of 1.5ºC in the world’s climate with respect to the pre-industrial era with the upper limit of never reaching the 2ºC increase level. Meanwhile, a Yale study dating of 2019 [15] projected an increase of 2.7ºC if the countries affected by the BRI followed historical carbon-intensive growth patterns even if the rest of the world adhered to the 2ºC increase level of emissions. Pàg. 20 Main Text 4.5. Political Conflicts and Interests During decades, the capitalist world had defended that free trade between countries developed the world and made all the parties better off, but in the late 1980s a new concept named strategic trade [16] appeared. This new current of thinking defends that a country can benefit from limiting free trade in some ways in order to benefit its own companies and economy. With the dawn of the new century and the catastrophic economic crisis of 2009, specific trade gained popularity among a new generation of politicians that have more populist tendencies. In this way, China has been applying tariffs and economic policies for years in order to benefit national companies grow, in front of the foreign companies investing there. Also, the USA started applying more protectionist policies under the Trump administration. This has been one of the reasons, as well as political and military tensions that have caused the trade war between China and the US. Regarding the EU, they are still one of the main defendants of the free world trade and keep making trade agreements with a lot of countries in the world. On the other hand, there’s a growing concern with China, their main trade partners, because they have suffered collateral damage from their trade war with the US while years of trade with them has generated a strong dependency with a country that is perceived as of little confidence. Furthermore, the strong Chinese inversion in European high added value sectors have worried the EU in terms of privacy, security and economic risk. Also, European institutions don’t like the uprising Chinese influence over developing countries in east Europe and the middle east that can take place if the Belt Road Initiative is developed in full scale. In front of China, who has called the EU weak and divided, it’s important that the EU countries keep united to gain strength and look for the long-term benefit instead of for populist measures. It’s also of the utmost importance to enforce the compliance of the agreed deals and to look for external allies to be able to pressure China. Regardless all the questions that have been detailed, the relation between the EU and China was considered to be positive in recent years, making possible the negotiation and agreement of the CAI. This positivity collapsed in March of 2021 [17] because the EU imposed sanctions to four Chinese officials for their implications in the repression of the Uighur community in the Chinese region of Xinjiang. This action started a series of countersanctions between both parties that ended in the freezing of the hardly fought CAI. In a chair’s statement, the European parliament [18] criticized that while they were sanctioning human rights violations, China was trying to limit free speech about their country everywhere in the world, something they had already been doing for years inside their borders. Consequently, the CAI seems that won’t be applied anytime soon because it would require a great diplomatic effort and none of the parts seems to be willing to do it. Moreover, the Effects of the SARS-Cov-2 pandemic into the China-EU trade: geographical and economical alternatives Pàg. 21 departure of Angela Merkel, one of the main promoters of the deal complicates even more the matter. This is just an example of what has been happening for a long time, every action of a foreign country that the Chinese government doesn’t like is responded by severe sanctions. Another case is the recent China-Lithuania tensions [19]. In the beginning of 2022, Lithuania allowed Taiwan (an independent country that China claims to be of their sovereignty) to open a defacto embassy in Vilnius. As a response, an enraged China started doing what has been called by the EU as “illegal trade practices” against Lithuanian companies. The EU has given institutional support to Lithuania and filed a lawsuit in the WTO, but the reality is that these measures don’t have much practical power and that most European countries have more interests on China than on Lithuania. Also, it remains to be seen what effect has the Ukraine-Russia war in all of this because even though China doesn’t like the war because of economic matters, they don’t have any intention of criticizing the actions of one of their main allies. Regardless of all these factors, China and the EU will have to end up understanding each other because rupture isn’t an option (remember that they are each other’s main trade partner). On the other hand, it will be very important to see how the new Germany’s administration’s policies evolve because Olav Scholz’s coalition contains different points of view in this matter. Also, the near elections in France and Hungary, one of the EU’s most China-friendly countries, could shape the future relations between both parts [20]. Pàg. 22 Main Text 5. Effects of the SARS-Cov-2 pandemic 5.1. Effects on China’s Industry Since China was the country where the pandemic started, logically they had the first wave of transmission sooner than the rest of the world. After an initial phase of scepticism that the Chinese government (as well as the whole world) had about the potential of the virus to become a pandemic, the authoritarian nature of the Chinese government made possible to implement much more drastic measures regarding the virus than those that the rest of the world adopted. Therefore, while the rest of the world suffered a tremendous upheaval of cases, China became practically Covid-free after the first wave. This can be seen in the following figure, where China is compared to Germany and Spain. Even though Germany and Spain are small countries in population compared to China (83M and 47M residents in Germany and Spain respectively against 1412M in China), the number of cases was much higher. It was also interesting to compare the numbers with the USA where much milder measures were taken, but the difference in number of cases was so big that the author considered that the plot lost significance (in any case the wave pattern was similar to those of Germany and Spain). Figure 5.1.1. Weekly confirmed cases in China, Spain and Germany in 2020 (Source: John Hopkins University) On the other hand, it must be noted that the Chinese reported data might not be as reliable as that of the western countries because the authorities in China control totally the information regarding the country in order to keep control of the population and silence any critics. An example of this is seen when looking at the data of the whole pandemic in the next Effects of the SARS-Cov-2 pandemic into the China-EU trade: geographical and economical alternatives Pàg. 23 two figures. Although in the first week of April 2022 China was suffering the worst rise in number of cases by far overpassing the numbers of the first wave reaching 153302 cases in a week, there were only two reported deaths that week. That doesn’t make sense since it would mean a death rate 0.0013% while the world average is of 1.24%. Figure 5.1.2. Number of weekly cases in China between January 28th 2020 and April 10th 2022 (Source: John Hopkins University) Figure 5.1.3. Number of weekly reported deaths in China between January 28th, 2020, and April 10th, 2022 (Source: John Hopkins University) In any way, it’s true that the tight control of the virus that the Chinese government has had is due to the strict policy that was adopted of zero tolerance against Covid imposing massive testing of the population and confinements when a small number of cases appeared in any region. An example of this policy is the confinement of the city of Shanghai in the first week Pàg. 24 Main Text of April 2022 after just 3000 cases appeared in a week in a city that has 25M inhabitants [21]. Regarding the effects of the pandemic in the Chinese economy, lockdowns affected industry less than what could be expected. In first place, the policy of city and province lockdowns when the first cases appeared allowed the global of the country to keep working (remember that China has over 1400M inhabitants, for example, the confinement of Shanghai represents just under 2% of its population) and, in second place, it has been reported that sometimes bubbles were created in the industry complexes where workers live so they never leave the designed safe zone (similarly to what was done for the winter Olympic Games for the athletes and media) and can keep working at the same rate [22]. Therefore, if the macroeconomic numbers are examined, even though there was a slow down in the GDP growth in 2020, the economy rebounded in 2021 surpassing the prepandemic levels. Also, exports behave in the same way during the 2019-2022 period with a slowdown in 2020 but overall growth. Just to clarify, the February drops that are observed in the second of the following figures are explained by the Chinese New Year festivities that take place each year. Finally, it is out of scope of this thesis to investigate if the 2020 slow down is a consequence of the China situation or a consequence of the general lockdown that was imposed elsewhere that affected much more negatively the rest of the economies but the latter is a real possibility. Figure 5.1.4. China GDP growth between 2011 and 2022 and forecast until 2026 (Source: Statista) Effects of the SARS-Cov-2 pandemic into the China-EU trade: geographical and economical alternatives Pàg. 25 Figure 5.1.5. China exports evolution (in billion US dollars) during the February 2019- February 2022 period (Source: Statista) 5.2. Effects on Container Shipping After having seen how the pandemic affected the production chains in China, this next section is going to discuss the “perfect storm” that occurred in the shipping of containers from China to western economies that caused huge delays in the supply chain and important rises of costs. First of all, the stop of production that the European and American factories suffered generated a situation in which containers that came from China full of supplies didn’t find any cargo to transport back to China. This scenery broke the equilibrium of the companies that use the containers to import from China and those that export to China paying one company each way of the trip. Therefore, these containers either got stuck in the western countries or had to come back to China empty (with the subsequential cost being faced by the company that wanted to import again from China). Secondly, the factories that build these types of containers faced the same problems to produce than all the other firms so the number of available containers could not be increased in order to solve the situation of container scarcity occurring. In third place, the duration that the container ships had to stay in each port of the commercial routes had to increase in order to respond to the sanitary measures of each port and to do disinfection tasks. Finally, the ports also suffered from lack of port personnel, truck drivers and warehouse workers because a lot of them had to take sick leaves and do quarantines. Especially dramatic is the case of truck drivers [23], a profession traditionally lacking personnel because unemployed people don’t want to face the hard Pàg. 32 Main Text As a result of the previous figures, the position of China as Europe’s main trading partner gained weight because while they increased their trade numbers, other huge actors like the USA and the UK were decreasing them [30]. The result of this situation was that, in 2021, China remained the third country where the EU exports the most behind the USA and the UK, but it was the leader in countries from where the EU imports doubling the numbers of the USA, who is in second place. Figure 5.4.4. EU’s main trading partners in exports and imports in 2021 (Source: Eurostat) Seeing these figures, it’s obvious that the EU is very dependent on China, but the same can be said in the opposite direction, because if the business relation fell apart, China wouldn’t be able to sell a lot of its production. Therefore, China has been very vocal to show their opposition to the recent attempts of the EU to become more independent economically. Also, Chinese officials have shown concern regarding the improvement of relations between the EU and the new USA administration and the hints of EU representatives that they would prefer trading with the USA instead of China for ideological reasons [31]. Effects of the SARS-Cov-2 pandemic into the China-EU trade: geographical and economical alternatives Pàg. 33 6. Effects on the final consumers When the pandemic began spreading in our country in March 2020, the principal fear among consumers was if whether supermarkets would run out of essential products such as food or toilet paper. This was far from reality and although in some specific moments there could be a lack of certain products in some places there wasn’t any moment during the pandemic where there was a scarcity of products for the general population. For comparison, there were more problems in the UK when the Brexit became effective than in Spain during the peak of the pandemic. In fact, the only products that the Spanish consumers could notice lacking availability were electronic products during the Black Friday-Christmas period of 2021. This is due to the fact that the demand of these products rose during this period and the companies already carried a lack of microprocessors that has already been explained in previous sections. Anyway, this was a very particular situation that wasn’t the general case. Figure 6.1. The situation of shortages in the UK when the Brexit became effective wasn’t seen during the whole pandemic in Spain Even though the consumers haven’t noticed a scarcity of the products that they consume as it was the case in some companies, what they experienced was a generalized inflation of the Pàg. 34 Main Text products in their consumption baskets. These increases of prices have been the result of a series of circumstances that can be differentiated between temporary causes and systemic causes. 6.1. Temporary Causes In April 2022, Spain recorded a record interannual inflation of 9.8%, this is almost five times the BCE target of 2% that is considered healthy among economies, and it was the record value since 1985 [32]. The trigger factor of this situation was the increase in price of fuels due to the Ukraine-Russia conflict, but the inflation had already begun escalating months before as a consequence of the pandemic. Figure 6.1.1. Spain’s interannual inflation between April 2017 and April 2022 (Source: Trading Economics) As it can be seen in the figure, before the pandemic, the value of inflation was around the target of 2% but when the pandemic hit, it fell to negative levels during the lockdown period in 2020. Then, as the lockdown ended, people started consuming more and the companies started producing in an accelerated way to recover the time lost. Then, as it was seen during previous sections, the supply chains saturated causing the industries’ costs to rise dramatically. This translated into increases in the price of final products across the board leading to an inflation rise that had not been seen in recent times. Even though the peak was favoured by the Ukraine conflict, it’s worth noting that before the war the inflation was already 7.6%, a value that had not occurred in all the 21st century. The principal driving factors were a 28.6% increase of the cost of energy with respect to one year before and a 5.2% increase in the food price. Discarding for a moment the period of the Ukraine conflict and going back to the causes, we Effects of the SARS-Cov-2 pandemic into the China-EU trade: geographical and economical alternatives Pàg. 35 have two principal actors in them. On the one hand, we have consumers that have cash available because it was saved during the lockdown months and now have the possibility of going back to consume services such as restaurants and tourism (inside the same country in most cases). On the other hand, we have trouble in the logistics sector that has not been able to recover at the same rhythm as consumption for the reasons mentioned in previous sections. Furthermore, we have an increase in the oil, gas and electricity prices because they have not returned to the pre-pandemic levels of production and now the demand has increased. The fact that fuels and energy experience rise in price is somewhat cyclical and it has proven before that it is a temporary shock before returning to normality. The problem is that in this case, the peak was very high and because of the circumstances, it extended in time. This extension in time endangers the economy into suffering second-round inflation. Secondround inflation is known as the phenomenon that occurs when a temporary shock as this one extends in time so much that all the other products of the consumer’s basket have to end up increasing prices (because in one way or another, the production of everything needs oil, gas and electricity). Then, the increase in prices across the board makes workers claim for higher wages when negotiating contracts. Consequently, this increase in wages further increases the cost of companies and the companies have to increase again the price of their products entering an inflationary loop. Figure 6.1.2. Inflation in the CPI basket in Spain, stratified by subclasses (Source: CaixaBank Research) Pàg. 36 Main Text Looking at this figure developed by CaixaBank Research in February 2022 [33], at this point in time the inflation is still driven by the initial factors of increases in the price of fuels and energy as well as food. Therefore, it cannot be said yet that the economy is suffering from second-round inflation. But if the situation was complex enough, another temporary shock of severe nature arrived. With the Ukraine conflict, what was a temporary shock gains possibilities of becoming permanent. Taking into account that 40% of the gas consumed in the EU is coming from Russia, political tensions with Russia makes that the price of gas will increase even more and in a medium-term perspective dragging also the price of energy in general. As of March of 2022, the interannual cost of electricity in Spain had increased 107.8% in Spain [34]. Figure 6.1.3. The Ukraine conflict is further worsening the inflationary pressures 6.2. Systematic Causes The capitalist world around which the western societies function is based on several founding principles such as the free market and perfect substitutes. Stemming from these principles, if a producer is charging too much for their products, another producer will start selling the same product for a lower price and, therefore, clients of the first company will migrate to the second company until the prices equalise. This might have worked in the past, but in today’s world, society rewards enormously the prestige that companies have. Now, the concept changes from perfect substitutes (two identical products) to imperfect substitutes (two Effects of the SARS-Cov-2 pandemic into the China-EU trade: geographical and economical alternatives Pàg. 37 products that offer the same function but are perceived differently by the consumer). One case of this concept is McDonald’s and Burger King. Although both companies offer fast food with similar results, there will be clients that prefer McDonald’s to Burger King and vice versa. Also, it’s worth to remark that this preference will be normally based around the experience and subjective perception of the food rather than the strict price offered. A practical example of these subjective preferences is the Pepsi Challenge [35] that was run in 1975 by PepsiCo in order to promote their product and that generated a feud between Pepsi and Coca-Cola. In this social experiment, it was proven (although the Coca-Cola company disputed its validity) that although most Americans said they preferred Coca-Cola over Pepsi, when they were given both products blindfolded, they preferred Pepsi by a significant margin. Figure 6.2.1. The Pepsi Challenge was run in the USA in 1975 and proved the importance of marketing and the brands’ name This introduction about imperfect substitutes intended to show the power that the big companies have gained through aggressive marketing during years and that represents a systematic cause of inflation. This power that can be found in several companies like Starbucks, McDonald’s and Amazon allow them to modify their prices without having to fear drops in the number of clients that they have because the clients will prefer to pay more rather than going to the competition. In the case of Starbucks, the price of their coffee is Pàg. 38 Main Text already much higher than the price of its theoretical competition but even if the prices increase further, the customers will keep coming in for the experience that they have in it. This was exactly what these companies used during the pandemic. Although these companies are sufficiently big to manage on their own the increase in costs suffered, they transferred the increase of costs to the customers in order to keep their margins intact. Figure 6.2.2. Starbucks’ Net Margin between 2017 and 2022 (Source: macrotrends.net) In the figure we can see the evolution of the net profit margin (defined as (total revenue - total business expenses)/total revenue). As it can be seen, although there was an initial slump due to the generalized lockdown, the net margin of Starbucks quickly picked up and recovered pre-pandemic levels. That means that the increase in costs that they faced (energy, logistics, etc.) was compensated by an increase in the price of their products until covering it completely. Figure 6.2.3. Starbucks’ Net Income between 2017 and 2022 (Source: macrotrends.net) Defining net income as total sales’ revenue minus total expenses of the company, the previous figure shows that by the second quarter of 2021, Starbucks had recovered and even surpassed their net income levels from before the pandemic. This is remarkable to see when the company is saying that because of the pandemic’s difficult economic times they Effects of the SARS-Cov-2 pandemic into the China-EU trade: geographical and economical alternatives Pàg. 39 had to increase the price of their products. In a similar case, the American chain of Mexican restaurants Chipotle has used the same tactics. In their case, they have even commented these tactics publicly with Jack Hartung, chief financial officer of Chipotle, saying “I would say that our ultimate goal, so this would be over the long term, maybe the medium term, is to fully protect our margins” [36] and justified it by saying “When you look at our pricing versus other restaurant companies’ for the quality of the food, the quantity of the food, and the quality and convenience of the experience, we offer great value. So we believe we have room to fully protect the margin.” Furthermore, there are innovative ways to increase prices. An example of this is the “service fee” that Chipotle has introduced for their online commands (separated from the “delivery fee”) and that would represent the cost of the workers that have prepared the order inside the restaurant. This was a cost that was traditionally included inside the price of the food as it would be the case of the cost of waiters when eating the food inside the restaurant. Therefore, the introduction of this fee is just another way to increase the price charged to the final consumer. Figure 6.2.4. Example of a Chipotle restaurant in the USA On the same source as before and in the same direction, Daniel T. Accordino, chief executive of Carrols Restaurant Group (a restaurant group managing over 1000 Burger King’s franchises) said in relation to the price increases “Over time, we generally have not seen a whole lot of pushback from consumers”. This remarks the ability of these companies to increase prices at their will and let the customers pay the increases in cost related to the pandemic. Pàg. 40 Main Text This situation can only be solved by the administrations by enforcing antitrust laws to the companies using these practices but, in general, any kind of sanction towards great American companies is not well received in the administrations where lobbies have a great impact. Anyway, the first step was made when the White House made an official statement [37] complaining about the fact that the four biggest Meat Processing Companies (who control about 70% of the market share of an uncompetitive market) took advantage of their power to increase their net margin over a 300% during the pandemic period. In the same statement, they promised to take strong actions against illegal price fixing and to enforce antitrust laws robustly. Effects of the SARS-Cov-2 pandemic into the China-EU trade: geographical and economical alternatives Pàg. 41 7. Effects of the pandemic on the Catalan Industry In order to obtain a closer look into how the pandemic affected the local economy, the author of this project contacted some cases of Catalan industries that were able to respond queries about how the pandemic affected them (the original queries can be read in the annexes) and apport some data to the project. These companies, focused on different subsectors of the industrial sector are: DOGA Group, EASY Chemical SL, QEV Technologies and an electric material company that asked to remain undisclosed. 7.1. DOGA Group Founded in 1958, DOGA started by manufacturing windshield washer/wiper kits in a house in the Alella street of Barcelona. After decades of continuous growth where they entered the markets of direct-current motors and stamping of welded kits, DOGA has opened subsidiaries all over the world while keeping their headquarters in Catalonia. Currently, they have production plants in Abrera (in a complex where the headquarters of the group are also located), Navarra, Morocco, China (Nantong), Italy and India. Also, they have commercial subsidiaries in the USA, Mexico and Brazil. Regarding their catalogue, it includes windshield wiper systems, washer systems, drive systems, tank systems, window lift systems, plastic components and rear-view mirrors [38]. Figure 7.1.1. First DOGA shop, located in Barcelona (1961) (Source: doga.es) Pàg. 48 Main Text Figure 7.3.3. Price evolution of Lithium between January 2020 and June 2022 (Source: QEV Technologies) In figures 7.3.1 and 7.3.2 a similar behaviour in the prices of copper and aluminium can be observed. In the year 2019 there’s a certain stability in the prices with even a slight decrease. Then as the pandemic hit (March 2020), the prices hit a minimum but afterwards, as factories reopened, the price of these raw materials started a significantly steep ascension that ended up making both aluminium and copper about 50% more expensive in 2021 than what it was in 2019. In figure 7.3.3. a similar behaviour can be seen for lithium but in this case the data reaches further showing the evolution in 2022. In 2022, the data shows that the decrease in price that started at the end of 2021 (and could also be seen in the prices of copper and aluminium) has not been constant because new factors such as the new break outs of Covid in China and the Ukrainian conflict have generated huge instabilities in the prices. Regarding another indispensable component of vehicles such as microchips, their price evolution can be seen in the following figure. Effects of the SARS-Cov-2 pandemic into the China-EU trade: geographical and economical alternatives Pàg. 49 Figure 7.3.4. Price evolution of Microchips between January 2017 and June 2022 (Source: QEV Technologies) Due to the fact that microchips are a very elaborated product needed every time more in the production of any device that has a minimal electronic system, their price had been already increasing in the past years. Then as the pandemic hit (after a natural temporary drop), this increase became out of control. In fact, the people of QEV technologies told the author of this project that, before the pandemic started, constructing the ECU of a vehicle (which has several microchips incorporated) would cost around 400€ and now it costs around 900€. Finally, the people of QEV technologies also commented on the huge increase in shipping costs that had already been mentioned by the other companies. In their case, before Covid they faced a cost of around 4500€ to receive a container from China but now the cost is of around 15000€. 7.4. Electrical Material Multinational Case Study To end up this section in a more quantitative way, the author of this project contacted a Catalan multinational specialized in the electrical material sector to see in numbers how the pandemic has affected them. Although the company asked to remain unknown, they were able to give data about the evolution of prices of some of their supplies during the pandemic period and the quantities in which they are typically bought of them. This data (which can be seen in tables in the annexes) allowed to develop the following analysis. Pàg. 50 Main Text Figure 7.4.1. Price evolution of supplies between January 2019 and April 2022 (Source: Own Elaboration) Figure 7.4.2. Price increases of supplies by percentages between January 2019 and April 2022 (Source: Own Elaboration) In first place, note that the quantitative values represented in the two figures above have been modified for privacy reasons (they are represented in monetary units instead of euros), Effects of the SARS-Cov-2 pandemic into the China-EU trade: geographical and economical alternatives Pàg. 51 but these modifications have been made proportionally so the analysis of this data can be done in the same way. Looking at the figures, it can be seen that during 2019 and 2020 the price of about half of the supplies is fixed by contract, limiting the decreases in price during the lockdown period and the following increases as factories reopened. The situation changed in 2021 when most of these contracts expired and the supplies started to be bought at market prices, which generated an increase in costs and much more variability. On the other hand, this isn’t the only explanation of this increase in the volatility of prices because, if the attention is focused in the case of pellets, their price was never fixed during the sample period, but their variability also increases a lot at the end, therefore, this variability is probably explained by external market factors. Although the previous graphs are certainly interesting to see the particular price evolution, it’s much more important to see the bigger picture of costs because, for example, the special magnets supply is the most expensive one, but they will clearly be in less demand than the common magnet. Therefore, the trimestral demands of each of these supplies were considered for the following plots. Figure 7.4.3. Total cost of supplies between January 2019 and April 2022 (Source: Own Elaboration) Pàg. 52 Main Text Figure 7.4.4. Accumulated increases in the total cost of supplies between January 2019 and April 2022 (Source: Own Elaboration) These figures reinforce the notion that the variability during 2019 and 2020 was fairly limited but in 2021 the situation became a little bit out of control. The different types of pellets, with their increased volatility in prices, drove significant increases in the total cost of supplies. If the total cost in April 2022 is compared to that of January 2019, the increase is of around 35% (50% increase with respect to the lowest point of costs in July 2020). This behaviour coincides with that seen in the other sections of the project. Since this is a clearly unsustainable situation in the long term, a more detailed analysis must be made about each type of supply. Therefore, the averages of the cost of each supply during the whole period was made and the result was the following. Effects of the SARS-Cov-2 pandemic into the China-EU trade: geographical and economical alternatives Pàg. 53 Figure 7.4.5. Average Cost of each supply during the sample period (Source: Own Elaboration) Table 7.4.1. Table with the average cost of supplies and their share on the total (Source: Own Elaboration) Seeing which were the average costs of each supply per trimester and their representative share in the total cost, an ABC classification of the supplies was made. Having an ABC classification will allow to look at the data in a more intuitive way when decisions will have to be made, giving more importance to the adequate supplies. In this way, the products that are included in the category A (common magnet and PC pellet) represent slightly more than the 50% of total costs and, including those supplies of category B (PE pellet and PP pellet) we account for 85% of the total cost. Pàg. 54 Main Text Analysing the next steps to follow for the company, the ABC classification will be used to decide the following actions. Seeing that the common magnet practically didn’t change price during the sample period, there probably exists a contract with a supplier that fixes its price. It’s of the utmost importance to be able to extend this contract for the near future since the current world market situation will probably lead to an increase in price of this supply when the contract expires. Regarding the PC, PE and PP pellets, it was seen that they are accounting for a big share of the total cost, and they are the supplies that are fluctuating the most in price. This situation must be solved. On the one hand, contacts with the suppliers could be made in order to fix a price with a medium-term contract. On the other hand, the production chains could be redesigned to reduce the quantities needed of these supplies. Following the ABC classification, the focus should be placed first in fixing the situation of the PC Pellet. Regarding the rest of supplies, their C category imply that they don’t represent an important share of the total cost. Accordingly, their cost could be allowed to fluctuate (and therefore probably increase) for a while but in the long-term it would be ideal to recover the contracts that were in place in 2019 and 2020. Effects of the SARS-Cov-2 pandemic into the China-EU trade: geographical and economical alternatives Pàg. 55 8. Forecast of the second half of 2022 and 2023 During 2022 and 2023 it was expected that coronavirus became endemic, and that industry came back to normality. Regarding the ports’ collapse, it was expected that the bottlenecks would get solved progressively. Furthermore, the construction of new vessels and containers was expected to generate a surplus that some actors thought could make the prices of TEU shipments fall significantly (although other actors were more sceptical because they thought that the oligopolist nature of the shipping market would moderate the falls). Although these expectations have fulfilled partially and coronavirus have become relatively normalized, the problems that were experienced during the pandemic have persisted. In this way, according to Thomas Knudsen [40], Managing Director of Toll Group (a group operating in transportation, warehousing and logistics by road, rail, sea and air) the disruptions in the global supply chains will continue for at least 12 months and possibly until the end of 2023. The reason for this pessimist forecast is due to the unsolved lack of truck drivers and people working in the ports as well as the persistent low productivity of the ports. On top of these problems, the uncertainty that remains with the situation of the pandemic in China, where a zero-tolerance policy is still implemented, will continue to create bottlenecks. For example, the Shanghai lockdown that was ordered in March-April was avoided by the port (as seen previously the biggest in the world) by making all the workers sleep in the same terminals of the port. Although this might keep the port open, that doesn’t mean that the infrastructure around the port keeps working and therefore the port sees their operations slow down significantly. Furthermore, when the lockdowns are lifted, there are huge releases of containers, which have been accumulating, towards America and Europe that the European and American ports can’t manage efficiently generating bottlenecks. Pàg. 56 Main Text Figure 8.1. Aerial view of the Shanghai port Further aggravating the mentioned problems, the Ukraine-Russia conflict has increased significantly the price of fuels that are logically needed during all the transportation of containers around the world, slowing down the reduction in transportation costs that the companies were starting to see. As well as the price of fuels, the price of all the other raw materials in general have increased. These increases are putting in danger the post-Covid recuperation that was forecasted for the western industries and, therefore, for the economies in general. Looking at macroeconomic figures, the real GDP growth that the European Commission forecasted in its winter 2022 forecast (pre-Ukraine conflict) was 4.0% in 2022 and 2.8% in 2023. On the other hand, in its spring forecast (considering the Ukraine tensions) these same figures had reduced to 2.7% and 2.3% respectively [41]. Focusing on inflation, in February, the pandemic had generated a year-to-year inflation of 4.8%, which was already worrisome, but it was expected to reduce to 2.1% (very close to the general 2% target) by the end of the year. Now, with the expectation of persisting tensions with Russia, the inflation expectations are 7.8%, 6.4% and 5.8% respectively for the remaining quarters of 2022 [42]. Since these figures in inflation generate poverty amongst the general population and, as seen in previous sections, might create inflationary loops, central banks are considering to retire the economic stimulus they had deployed to fight the pandemic consequences and to increase interest rates. The problem is that these measures might break the expectations of investors and end up destabilizing the economies. In the worst cases, they could even totally stop the recuperation and generate a new economic crisis. Effects of the SARS-Cov-2 pandemic into the China-EU trade: geographical and economical alternatives Pàg. 57 Figure 8.2. The decisions made by the ECB on the next months will be especially determinant for the economic recovery Pàg. 64 Main Text 10. Economic Study Given the theoretical nature of this project, it is difficult to make an economic study quantifying the costs of realizing the project. In order to make an approximation, 4 different aspects will be quantified: the cost of time of the author (which would represent a worker’s wage), the cost of electricity, the cost of the computer depreciation and the cost of the software used. The project consists of 12 ECTS credits representing 30 hours of work per credit. Consequently, the project took 360 hours that were distributed approximately in the tasks shown in the following Gantt chart. Table 10.1. Gantt Chart with the distribution of time spent (Source: Own Elaboration) These 360 hours will be accounted at a rate of 8€/hour as it is determined by the school’s internship bargaining agreement. Regarding the cost of electricity, the author’s household has a flat rate of 82€/month. Here several items must be considered, the household includes 4 residents and the project lasted for four months, then the 360 hours totalling the project will be divided by the four month’s total hours. Finally, the costs of the computer are divided between software and hardware. The software used was Microsoft office which costs 7€/month and the hardware used is a HP computer that costed 350€ three years ago, therefore the fraction of that time that the project spanned will be considered. The final recount of costs is shown in the following table. Effects of the SARS-Cov-2 pandemic into the China-EU trade: geographical and economical alternatives Pàg. 65 Table 10.2. Recount of total costs of the project (Source: Own Elaboration) As seen in the previous table, the cost of the project is mainly the time cost coming from the author. Specifically, it accounts for 97% of the total economic cost of the project. Aquí pot anar el títol del vostre TFG/TFM Pàg. 67 Conclusions The objectives of this project were to analyse how the SARS-CoV2 pandemic affected the industries in the different parts of the world (principally dividing between China and EU/USA) and if it affected the companies’ long-term plans of production. As seen in the context section, there’s a relation of strong dependence that makes western industries rely totally on the Chinese production of supplies and posterior shipment in cargo vessels. When the pandemic hit, China managed to maintain the factories open thanks to more strict population controls but, in the western world, production lines slowed down significantly. When the pandemic lowered enough to be able to allow factories to reopen with a certain normality, a huge imbalance between western demand of supplies and Chinese capacity to produce them led to huge increases in these supply prices. In parallel, a situation of container scarcity and increases in fuels’ prices made shipping rates to reach prices never seen before. These factors combined made that the final consumers suffered a huge inflation at a rate not seen in the 21st century. It remains to be seen how the central banks will solve this problematic situation without triggering a new economic crisis because new Covid outbreaks and political tensions will continue to fuel it in the near future. On a more microeconomic level, the cases of DOGA Group and Easy Chemical SL showed that the shipping costs of getting supplies increased dramatically for these companies with increases of 700%, but it seems that the situation started getting better at the end of 2021. Regarding QEV Technologies and the electrical material company, their data showed that the price of the supplies also increased substantially and became more unstable during the pandemic. Therefore, it has gained even more importance to have a good planification of production and good commercial relations with suppliers that allow to obtain mutually beneficial fixed contracts for the medium and long terms. All the factors mentioned above made companies to start planning to leave China in the long term. Relocating to other countries would allow those companies to search for places that are closer to the final production site and, therefore, have a lower shipping and environmental cost. Furthermore, it would allow those companies to search for countries that have better diplomatic relations with the western countries and therefore have less unpredictability in the future. On the other hand, the strong dependence on China, where several levels of the supply chain are located, will make very difficult to move production away. Finally, the next steps would be to see how the Ukrainian conflict ends up mixing with the pandemic affecting the economic landscape in the following months and which Pág. 68 Memoria consequences have the policies of the different central banks to fight inflation. Acknowledgments In first place, I want to thank my tutor Mr Iñaki Gras for his advice and knowledge-sharing as well as for his support during the whole length of this project. Also, I want to show my appreciation to Mr Jose María Ríos of Easy Chemical SL; Mr Matías Ripoll, Mr Marc Fusté and Ms Esther Merino of DOGA Group; Mr Aitor González of QEV Technologies and the people of the electrical material company that asked to remain undisclosed. Their selfless help allowed me to obtain a lot of material that offered great value for the project. Finally, I want to thank my family, professors and colleagues for their support during my academic life in ETSEIB/UPF, without them this project would not have been possible. Pàg. 70 Memòria Bibliography [1] COVID-19 CORONAVIRUS PANDEMIC. Worldometers, March 1st, 2022. [https://www.worldometers.info/coronavirus/] [2] La inflación en España se dispara hasta el 7,4% en febrero y toca su mayor nivel en 33 años. El Economista, February 28th, 2022. [https://www.eleconomista.es/economia/noticias/11640345/02/22/La-inflacion-en-Espana-se- dispara-hasta-el-74-en-febrero-su-mayor-nivel-desde-julio-de-1989.html] [3] What we stand for. World Trade Organization. [https://www.wto.org/english/thewto_e/whatis_e/what_stand_for_e.htm] [4] Trade, Policy, Countries and Regions, China. European Union, 2021. [https://ec.europa.eu/trade/policy/countries-and-regions/countries/china/] [5] The EU-China agreement explained. European Union, 2021. [https://ec.europa.eu/trade/policy/in-focus/eu-china-agreement/agreement-explained/] [6] Catalunya no s’escapa de la “crisi dels contenidos”. Irene Montagut, Nació Digital, November 14th 2021. [https://www.naciodigital.cat/noticia/226721/catalunya-no-escapa-crisi- dels-contenidors] [7] 5 Major Shipping Routes Used for Global Trade. Emily Heaslip, Sofar Ocean. [https://www.sofarocean.com/posts/5-major-shipping-routes-used-for-global-trade] [8] The Top 50 Container Ports. World Shipping Council, 2020. [https://www.worldshipping.org/top-50-ports] [9] Maersk gestionará 18000 contenedores y empleará a 80 personas en el Port de Barcelona. Maria Teresa Coca, The New Barcelona Post, January 22nd, 2022. [https://www.thenewbarcelonapost.com/maersk-gestionara-18-000-contenedores-empleara- 80-personas-zal-port-barcelona/] [10] Memòria annual 2020. Port De Barcelona, 2021 [https://www.portdebarcelona.cat/memoria2020/pdf/cat-memoria-anual-2020-port-de- barcelona.pdf]. [11] Belt and Road Initiative [https://www.beltroad-initiative.com/belt-and-road/] [12] Belt and Road Initiative. World Bank, March 29th, 2018. [https://www.worldbank.org/en/topic/regional-integration/brief/belt-and-road-initiative] Aquí pot anar el títol del vostre TFG/TFM Pág. 71 [13] The Belt and Road Initiative is overhyped, commercially. Derek Scissors, American Enterprise Institute. Statement before the Senate Committee on Finance, Subcommittee on International Trade, Customs and Global Competitiveness on “China’s Belt and Road Initiative”, June 12th, 2009. [https://www.aei.org/wp-content/uploads/2019/06/BRI-Senate- testimony-6.12.19.pdf] [14] Transport infrastructure: the Connecting Europe Facility and the Trans-European Transport Network. Business Europe, October 17th, 2018. [https://www.businesseurope.eu/publications/transport-infrastructure-connecting-europe- facility-and-trans-european-transport] [15] China’s Belt and Road Initiative could drive warming to 2.7 degrees. Yale Environment 360, September 4th, 2019. [https://e360.yale.edu/digest/chinas-belt-and-road-initiative-could- drive-warming-to-2-7-degrees] [16] The EU, China and strategic trade: context and priorities. Pau Ruiz Guix, El País, January 9th, 2021. [https://agendapublica.elpais.com/noticia/16660/eu-china-and-strategic- trade-context-and-priorities] [17] EU parliament ‘freezes’ China trade deal over sanctions. Vincent Ni, The Guardian, May 20th, 2021. [https://www.theguardian.com/world/2021/may/20/eu-parliament-freezes-china- trade-deal-over-sanctions] [18] Chair’s statement of 23 March 2021 on EU sanctions on human right violations; Counter-sanctions by the PRC. European Parliament, March 23rd, 2021. [https://www.europarl.europa.eu/delegations/en/chair-s-statement-of-23-march-2021-on- eu/product-details/20210324DPU29209] [19] Lithuania-China row: EU escalates trade dispute with Beijing. Jessica Parker, BBC, January 27th, 2022 [https://www.bbc.com/news/world-europe-60140561] [20] 2022: Continued turbulence in EU-China relations. FIPRA, February 24th, 2022. [https://fipra.com/update/2022-continued-turbulence-in-eu-china-relations/] [21] Covid lockdown extended in Shanghai as outbreak puts economy on the skids. Martin Farrer, The Guardian, April 1st, 2022. [https://www.theguardian.com/world/2022/apr/01/covidlockdown-extended-for-parts-of-shanghai-as-city-struggles-to-control-omicron] [22] China finds way to do Covid Zero while keeping factories open. Bloomberg News, March 17th 2022. [https://www.bloomberg.com/news/articles/2022-03-17/china-finds-way-to-do- covid-zero-while-keeping-factories-open] Pàg. 72 Memòria [23] Everything you’re waiting for is in these containers. Chris Isidore, CNN Business, October 23rd, 2021. [https://edition.cnn.com/2021/10/20/business/la-long-beach-port- congestion-problem-national-impact/index.html] [24] La falta de contenedores en China dispara los precios, retrasa los envíos y enfada a sus clientes. Álvaro Sánchez, El País, January 20th, 2021. [https://elpais.com/economia/2021-01- 19/la-falta-de-contenedores-en-china-dispara-los-precios-retrasa-los-envios-y-enfada-a-sus- clientes.html] [25] A.P Moller-Maersk Gross Profit 2015-2021. Macrotrends. [https://www.macrotrends.net/stocks/charts/AMKBY/ap-moller-maersk/gross-profit] [26] Maersk, el dueño de los mares: “No se ve el final de la crisis de contenedores”. Francisco S. Jiménez, El Economista, November 2nd, 2021. [https://www.eleconomista.es/empresas-finanzas/noticias/11461025/11/21/Maersk-el-dueno- de-los-mares-No-se-ve-el-final-de-la-crisis-de-contenedores.html] [27] Spain Government Debt to GDP. Trading Economics. [https://tradingeconomics.com/spain/government-debt-to-gdp] [28] Jordi Morera, Canaletas SA’s General Director, in the “Impacte d’esdeveniments disruptius a les cadenes de subministrament” conference organized by Enginyers Industrials de Catalunya, April 7th, 2022. [29] La producción de coches cerrará el año por debajo de 2020 tras acumular un semestre de caídas. Ankor Tejero, El Economista, December 20th, 2021. [https://www.eleconomista.es/motor/noticias/11531672/12/21/La-produccion-de-coches- cerrara-el-ano-por-debajo-de-2020-tras-acumular-un-semestre-de-caidas.html] [30] China overtakes the US as EU’s biggest trading partner. BBC, February 17th, 2021. [https://www.bbc.com/news/business-56093378] [31] China accuses EU of threatening global trade. Sam Fleming and Andy Bounds, Financial Times, November 15th, 2021. [https://www.ft.com/content/9c9dbc9e-1d33-4e41- 9c79-b0df51cd678e] [32] La inflación alcanza en España el 9.8%, la más alta desde 1985. Euronews, April 13th, 2022. [https://es.euronews.com/2022/04/13/la-inflacion-alcanza-en-espana-el-9-8-la-mas- alta-desde-1985] [33] The second-round effects of the inflationary shock. Màxim Ventura Bolet, CaixaBank Research. February 9th, 2022. [https://www.caixabankresearch.com/en/economics- Aquí pot anar el títol del vostre TFG/TFM Pág. 73 markets/inflation/second-round-effects-inflationary-shock] [34] El coste de la energía y los alimentos dispara la inflación al 9.8%, su nivel más elevado desde 1985. Álvaro Sánchez, El País, April 13th, 2022. [https://elpais.com/economia/2022- 04-13/la-inflacion-escala-en-marzo-al-98-su-nivel-mas-alto-desde-1985.html] [35] The Pepsi Challenge: How Pepsi won the battle but lost the challenge. Juicebox Interactive. [https://juiceboxinteractive.com/blog/how-pepsi-won-the-battle-but-lost-the- challenge/] [36] How much are you willing to pay for a burrito?. Julie Cresswell, New York Times, January 21st 2022. [https://www.nytimes.com/2022/01/21/business/fast-food-prices- inflation.html] [37] Recent Data Show Dominant Meat Processing Companies Are Taking Advantage of Market Power to Raise Prices and Grow Profit Margins. Brian Deese, Sameera Fazili and Bharat Ramamurti, The White House, December 10th 2021. [https://www.whitehouse.gov/briefing-room/blog/2021/12/10/recent-data-show-dominant- meat-processing-companies-are-taking-advantage-of-market-power-to-raise-prices-and- grow-profit-margins/] [38] History – DOGA. DOGA Group. [https://www.doga.es/timeline/] [39] ¿Quién es QEV Technologies y por qué están interesados en los terrenos de Nissan?. David Fernández, La Razón, December 29th, 2021. [https://www.larazon.es/cataluna/20211229/et6slz3fhrh6lhhvyvnfeqkpna.html] [40] Global supply chain disruption to continue into 2023. Marcus Hand, Seatrade Maritime News, April 12th, 2022. [https://www.seatrade-maritime.com/supply-chain-and- logistics/global-supply-chain-disruption-continue-2023] [41] Spring 2022 Economic Forecast: Russian invasion tests EU economic resilience. Press Release, European Commission, May 16th, 2022. [https://ec.europa.eu/commission/presscorner/detail/en/IP_22_3070] [42] Euro zone inflation to run hot, fan recession risk. Swathi Nair, Reuters, April 7th, 2022 [https://www.reuters.com/world/europe/euro-zone-inflation-run-hot-fan-recession-risk-2022- 04-07/] [43] European companies increasingly moving to reshore Asia production. Consultancy.eu, March 2nd, 2022. [https://www.consultancy.eu/news/7430/european-companies-increasingly- moving-to-reshore-asia-production]