Impact of Corona Virus on Chinese Economy.LogYcode
Since last month, the world has been shaken by the current outbreak of a deadly virus namely novel coronavirus (2019-nCoV) which is said to be originated from the Wuhan city in China in the last week of December, causing multiple deaths in and around china. The number of cases reported by date is more than 17,000 whilst the casualties so far reported are 361 in China and 1 outside China.
Seventeen years and China have evolved as the primary strand of the global economy, yet another outbreak has caused a decline in growth in majorly all the sectors. International Companies that are dependent on the Chinese market for the sales and manufacture of the different products and parts are to face major setbacks as the coronavirus is set to have a major effect on the lower segment of the society in contrast to the SARS effecting all the segments of working-class, causing shortage and high wages of labor in all labor-intensive industries.
This adds to the pre-existing conflict between US-China, where tariffs on various products imported to and from both the countries costed more than double/triple of the price of the goods to the business and consumers. To the companies, manufacturing their product(s) in China and importing to U.S. tariffs has seen quite the rise. Ongoing negotiations between the countries have proven no luck.
On the other side, Oil imports being the major reason for the close relations of China-Iran slashes, as price per barrel fell to a new low because of the demand impact of the coronavirus. Travel restrictions and shutting down of major Chinese industrial region had a major impact on oil demand. Moreover, in the past few years, sanctions were imposed by the U.S. on various Chinese companies for helping Iran. This decreased compliance between China and Iran.
Followed by the closedown of major American stores like apple, Starbucks and Ikea, sales of big players in the shoe and apparel industry like Nike, under armor have smashed. International passenger and cargo airlines as United, Delta, British Airways, Lufthansa, have shut their flights to China due to the spread of the virus. Lockdown within the region has severely impacted the local logistics which requires access to the highway for movement in/out of the region. The inbound and outbound air cargo, road, ship, and rail cargo have faced major suspension of operations as the coronavirus crisis continues. In the event of the crisis, China is extending its help to import face masks individually packed in separate containers from neighboring countries.
China’s economic growth is expected to slip by 0.5 percent against 6 percent last year due to the impact coronavirus which would, in turn, impact the global economic growth by 0.2 percent. Further, the impact of US-China and US-Iran conflicts has added to the lowest annual economic growth in nearly 30 years. After SARS, China suffered a recession for several months and responded back in a very dramatic way. The same is about to happen this same but the difference is, this time the after-effects will be felt on a large scale.