ICYMI, China’s biggest city, Shanghai, has been on lockdown since late March. Because the Chinese government is attempting to eliminate COVID-19 with what some are calling a “zero-covid” policy. And it could create big economic problems around the world.
Here’s what you need to know about China’s lockdowns…
While Shanghai is just one city, it’s a massive player in the global economy. It’s home to about three times more people than New York City, the world’s busiest port, and manufacturing plants that are key for big businesses. Like Tesla, Volkswagen, Honda, LG, and Apple, just to name a few.
So experts are warning that shutting it down will have worldwide economic impacts, including for the US. Here’s what that could mean for your money.
Is shopping for a big-ticket item on your to-do list?
Things like electronics, cars, and appliances could be getting more expensive soon. Or harder to get your hands on. So strike while you can.Shopping for a car could be especially difficult. (Hint: The auto industry has been hard hit by these lockdowns.)
A few ways to save some on auto financing: Shop around for the best interest rate and insurance. Wait until you have enough saved up to make a larger down payment (hello, smaller monthly payments). And look for cheaper alternatives (i.e. a Toyota instead of a Lexus).
Ordering anything soon?
Be prepared to get it later. Experts predict rampant shipping delays through summer 2022, so allow yourself some extra time to get that air fryer or iPhone.
Can’t wait? Take a look at what’s available on sites like Facebook Marketplace or other secondhand shopping apps. You might save yourself some valuable time (and maybe even a few extra bucks).
Have you been watching your investments closely?
Stop. Because your 401(k) and IRA balances could be in for a bumpy ride. And investors are worried. Which is sending the global stock market down as companies struggle to get products into consumers’ hands.
Your best move? Probably to do nothing. Stay invested, as things could change in the future. Over the long term, stocks overall have always gone up (eventually). So it's better to wait it out than to sell now at a loss.
Simply existing right now?
It could get more expensive. With supply chains snarled, economists are warning that inflation could get worse. Because high demand + low supply = higher prices. Especially with added pressure from the war in Ukraine.
To handle higher prices, adjust your budget and see how you can make more room. And watch out for all the ways inflation can show up in your everyday life to make choices that work for you (and your money).
China’s lockdowns have a far-reaching impact. And they could affect the US economy and your money. Prepare for even higher prices and more empty shelves for things like electronics this summer.
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