Goldman Sachs on their outlook for China supply chain issues:

1. China's energy shortages

2. and zero-COVID policy

create considerable uncertainty.

GS note that China is

  • home to 30% of the global manufacturing capacity

and say that current low levels of natural immunity suggest that a rise in virus spread during the winter could lead to renewed lockdowns

The danger of these is that they

  • extend supply chain disruptions and delay the normalization of input cost pressures

Otherwise GS is seeing an easing of supply chain bottlenecks:

  • We see reasons for optimism regarding the resolution of supply chain bottlenecks and easing cost pressures, but risks remain.
  • Shipping rates have generally declined from September's peak, and a number of companies have recently indicated optimism that supply chains are inflecting for the better. including a number of Automakers.
  • According to GXO Logistics, "we're through the worst of it" and "things will look a bit smoother as we move forward." However, the latest ISM Manufacturing report showed worsening survey responses regarding supplier delivery times.