China lockdowns impeding supply chain recovery, slowdown risks spillovers, Yellen says

Published Wed, May 18, 2022 · 10:24 PM

US Treasury Secretary Janet Yellen said on Wednesday (May 18) that Covid-19 lockdowns in China appear to be impeding the flow of goods and hampering global supply chains and a broader slowdown in growth in the world's No 2 economy could have global spillover effects that warrant close attention.

"Certainly the lockdowns look like they are impeding the production and flow of goods and services, given how extensive they are, and compounding supply chain difficulties that we have had that have boosted prices," Yellen told reporters at a press conference in Bonn, where she will be meeting with top finance officials from the world's 7 leading developed economies.

"Although some of those pressures seem to be mitigating, the developments in China exacerbate those supply-chain pressures," Yellen said. "And so that's a source of concern."

Also a growing concern is the sluggishness in the Chinese economy that has arisen in large part from its zero-Covid policy that has shut down activity in major domestic economic hubs for weeks.

"China also seems to be experiencing a slowdown in growth. As one of the largest economies in the globe, China's economic performance really has spillover impacts on growth all around the world," Yellen said. "So that is a factor that affects the global outlook, and we're monitoring carefully what happens in China and what their policy responses are." REUTERS