A warning from the Chinese Communist regime’s Ministry of Commerce sparked a wave of “panic buying” of food and necessities among the Chinese.
The statement urged local authorities to ensure adequate food supplies over the next few months and encouraged people to stock, according to a Bloomberg update on Nov. 2.
Within hours of the announcement made via the Twitter-like Weibo app, tens of millions of views and comments evidenced netizens’ concern about it.
An immediate effect of the rushed and unusual purchases was the increase in the prices of vegetables and other items, with a consequent rise in the value of the shares of companies linked to the production of these items.
The food manufacturing companies, Fu Jian Anjoy Foods Co, Chen Ke Ming Food Manufacturing Co, and Toly Bread Co, recorded increases in the value of their shares between 6.5% and 10%.
In the previous weeks, cauliflower and broccoli were already costing 50% more than the usual price, and spinach soared 157% in just four weeks. In some cases, vegetables cost more than meat.
The Ministry of Trade’s warning prompted Internet users to come up with several hypotheses as to what might have caused it.
Among them were the proximity of winter, which makes food production, transport and storage more difficult. Also the extensive floods that covered a large part of Shandong province, the largest producer.
Another theory involved possible plans for an attack on Taiwan, but one of the comments on this subject disappeared within hours of being published, according to Bloomberg.
They also considered as a possible cause of the warning the growing outbreak of diseases, which caused lockouts and travel restrictions after spreading to more than half of the mainland’s provinces.
In this worrying context, Chinese Communist Party (CCP) agencies called for control and made recommendations to local governments to better coordinate local vegetable supply chains.
This warning from the Chinese regime came two weeks after another of its agencies urged companies not to hoard food.
On the other hand, the CCP is facing major difficulties in the economic sector, where for months the Evergrande Group and other major real estate companies have defaulted on their debts, causing great turmoil on world stock markets.
According to the Chinese regime’s media, more than 300 real estate companies, including Evergrande, Fancy Year and Synergy Group, have failed in business this year alone, also affecting the steel and construction materials machinery industries.
In this context, analysts at Nomura Conglomerate estimate that Chinese regime builders took on more than $5 trillion in debt during the construction boom.
This debt is nearly double that at the end of 2016. It is also higher than the gross domestic product (GDP) of Japan, the world’s third-largest economy, according to data from last year. All this as global markets brace for a possible wave of defaults by the Chinese regime.