The toy industry is deeply entwined with China. Chinese factories make 86% of our toys, so what happens in China is vital to anyone in the toy industry. Due to the change in the world and China, I have decided to begin writing a column focusing on news that will potentially impact the toy industry.
$5,000 for an Economy Class Ticket to Hong Kong
You read that headline right. Plane tickets to Hong Kong have gone through the roof. Here is how Wall Street Journal writer Dan Strumpf explains it:
Flights to China have soared beyond those increases—sometimes as much as 10 times higher than prepandemic fares—as Beijing’s continued adherence to zero-Covid policies has kept flights into the country scarce, while demand inches higher following a modest relaxation to China’s strict entry restrictions.
Flying to China in Economy Class Will Cost You $5,000, Dan Strumpf, Wall Street Journal, October 17, 2022
And it is not just China. Suzanne Rowan Kelleher, in her Forbes article, “Why Airfares Have Risen Five Times Faster Than The Overall Inflation Rate,” writes, “On an annual basis…airfare inflation was up a massive 42.9%, the highest on record and more than five times higher than the overall inflation rate of 8.2%.”
She blames the increases on sharply increased fuel prices and a rebound in travel. That, plus fewer plane flights to destinations, is making it harder to get a well-priced flight.
China Delays Disclosing GDP and Other Economic Data
It is almost required that countries disclose their economic data on a quarterly basis. It is, therefore, disquieting that China has, for the first time, decided not to reveal how its economy has fared from July through September.
China is currently holding its bi-decade Communist Party meeting, and some believe that the results have been less than stellar and that now is not a good time to let the world know. These economic indicators are vital for businesses in making investment decisions regarding China. The lack of information leaves us all flying blind. Let’s hope the Chinese government turns the information spigot back on soon.
China Doubles Down on Covid Quarantines
A number of trade shows take place each year in China, including The Shenzhen Toy & Edu Fair and the China International Toy Show in Shanghai, to name two. I have been to both, and they are large, dynamic shows that attract buyers and sellers from all over China. I don’t plan on attending any time soon, however, as it appears China has no plans to back off its Covid quarantine policies, and I don’t want to sit in a hotel room for ten days.
Lily Kuo, writing for The Washington Post, makes an interesting point in her article, “Few signs that China is trying to escape its ‘zero covid’ trap.” Whereas most of the writing I have seen has focused on political motivations, she focuses on the medical reason, the lack of immunity among the Chinese population.
Fully lifting the policy could invite disaster. China’s 1.4 billion people not only have little natural immunity as a result of a low infection rate, but they have been immunized with domestic vaccines that are less effective against newer, highly transmissible variants of the coronavirus. China neverapproved the use of mRNA vaccines deployed throughout the rest of the world. If they open up now, there will be a major outbreak immediately.