China’s supply chains are beginning to show signs of acute strain as the US war in Iran tests the limits of President Xi Jinping’s years-long effort to prepare his nation for external shocks.
Analysts credited Xi’s administration in the immediate aftermath of the outbreak of the war as China, the world’s factory floor, appeared better prepared than many other major economies to weather a storm.
But six weeks into a conflict that has throttled global energy markets, sharp price increases and supply disruptions have emerged across key products that form the backbone of Chinese industry. In March China recorded its first year-on-year increase in factory gate prices since 2022.
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