China’s industrial sector is seeing a dramatic decline in U.S. demand as the Asian giant struggles with COVID lockdowns.

CNBC Supply Chain Heat Map data shows that U.S. manufacturing orders in China have shrunk by 40%. Consequently, Worldwide Logistics believes Chinese plants will cease operations half a month earlier than usual for the Chinese New Year, and the festive event for 2023 is slated for January 21.

Worldwide Logistics CEO Joe Monaghan said, “Many of the manufacturers will be closed in early January for the holiday, which is much earlier than last year.”

Tracking of blank sailings, or canceled sailings, reveals that the transpacific vessel capacity from China to the is reducing rapidly. According to CNBC, nearly half of the U.S. West Coast services provided by the 2M Alliance between Maersk and MSC have been canceled for December. Up until Chinese New Year, the combined vessel capacity of The Ocean Alliance and THE Alliance has been reduced by 40–50%.

The Ocean Alliance included France’s CMA CGM, China’s Cosco Shipping, OOCL, and Taiwan’s Evergreen. The Alliance is joined by Singapore’s Ocean Network Express, Germany’s Hapag-Lloyd, South Korea’s HMM, and Taiwan’s Yang Ming Line.

The Financial Times reported in November that manufacturers in China were shut down on a large scale because of slumping orders. Owners told the Times it had declined by 30 to 50% in some industries.

One owner said, “The decline in orders and the constant lockdowns were all reasons why I wanted to close the factory.”

The Chinese government is loosening some of its zero-COVID strategies after an outpouring of public anger in late November that later spread to the Chinese communities in other countries. 
But for some companies such as Apple, whose biggest plant in China has been struggling to resume production since late October, November spelled the last straw. The Wall Street Journal reported on December 3 that the tech giant is urging its suppliers to move some of its production out of China.

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