Shanghai's lockdown leaves legacy of supply chain woes

It has been hailed as the great reopening: After two months of strict lockdown to curb Covid-19 in Shanghai, the authorities lifted most restrictions at the start of this month. But as the economic powerhouse judders back to life, the effects of the shutdown continue to reverberate across the sea in Japan.

The Shanghai lockdown brought factories to a halt, exacerbating the problems for automakers already struggling to deal with a global semiconductor shortage.

Japan's Honda, Mazda and Mitsubishi were forced to reduce their domestic and overseas production in April by 54 percent, 49 percent and 31 percent, respectively, compared to a year earlier. Nissan slashed production by 26 percent, Toyota by 9 percent and Suzuki by 4 percent.

Shanghai's lockdown has severely impacted Japanese car production.

Air conditioners in short supply

Home appliance makers also felt the pain. On a wholesale website used by home electronics distributers, many air conditioner models are in short supply; others are unavailable.

Tokyo retailer Komei Denki says customers have been inquiring about air conditioners far earlier than usual this year due to concerns about shortages.

But in many cases the models they want are unavailable. And even when orders can be placed, Komei Denki doesn't know when they will arrive. Komei Denki President Takano Toru says, "In normal years, we receive goods the day after they're ordered. We never imagined such confusion could exist."

Coronavirus-related lockdowns in China have caused shortages of home appliances, including air conditioners.

Onion prices soar

China's lockdowns have also impacted food supplies and prices in Japan. One supermarket in Tokyo sells peeled Chinese onions. The peeling is done in Shanghai, and when the lockdown disrupted that work, the price of the produce rocketed. The supermarket hiked the price by 30 percent. That, it turn, triggered a surge in demand for Japanese onions, and the price of those doubled.

Akiba Hiromichi, president of supermarket chain Akidai, says, "As prices increased, we became acutely aware of how much we rely on China. The lockdown has been lifted for now, but we never know when restrictions will be reinstated. The future is rife with uncertainty."

The price of imported onions has soared in Japan due to the impact of lockdowns in China.

Nogimori Minoru, a senior economist of The Japan Research Institute, says the disruptions could have far-reaching effects. "In Shanghai Port, the handling of huge amounts of cargo that have accumulated over the past two months in nearby waters has just begun. The restrictions have been lifted, but distribution won't return to normal overnight. It's quite possible that some foreign businesses will leave China as a result of the country's ongoing zero-COVID measures."