By Peter Zeihan on December 21, 2021

As we now enter the third year of the ongoing COVID pandemic, we have had an evolution in how countries–especially in East Asia–react to outbreaks. Gone are the days of national lockdowns, and instead provincial, city, and even facility specific lockdowns are the norm. While it might sound like an improvement for supply chain security, it’s not: instead of a wide-spread lockdown that could carve out exemptions for certain classes of workers or strategic manufacturing needs, entire facilities are shut down and no goods can get out.

But there’s a much more significant shift underway than the changing minutiae of how countries react to rising infection levels and new variants. It’s China. The Chinese Communist Party once based its legitimacy on guaranteeing full employment and economic prosperity for its people. Now, the Chinese population looks to Beijing to guarantee its health. Zero-tolerance lockdowns, like the one currently underway in Zhejiang and the globally significant port of Ningbo, reflect a Chinese strategy geared toward proving to its citizens that it takes their concerns regarding COVID seriously. Not keeping jobs at a factory or port facility filled. Not reaching artificial production quotas. Not making sure foreign supply demand is met.

After decades of orienting national policy toward making China the largest and most important part of as many global supply chains as possible, Beijing’s decision-making rationale has shifted. And with it, China’s ability to be a reliable link in global supply chains.