Coronavius has spread all over the world. Upon analysis, the Coronavirus has also infected the economies of many countries.
On China’s Economies
The Coronavirus originated from China, specifically the Wuhan province. Since Wuhan is ground zero, the number of infected and dead people are steadily rising. The Chinese government has imposed a strict set of restrictions all around.
The restrictions in Wuhan affect more than 11 million people.
The biggest restriction that has been made public is the lockdown. People are being told to stay in their houses. However, without the restriction people may stay in regardless. This is because they are afraid of the virus and being infected.
Travelling for business matters is also restricted. Even the movement of certain good and workers doing the job has been stunted.
Like the Coronavirus, these set of restrictions have spread to nearby Hubei province. It may still spread to other parts of China.
The Coronavirus could not have come at a more inopportune time. The country has recently gone through the Lunar New Year Break. This break was inevitably extended due to the virus.
This means that businesses were not able to reap the benefits of the holidays. Since people opted to stay in, no one frequented the cinemas, restaurants, hotels, shops, and even public transportation.
Businesses never stop though. Business owners will continue to pay their overhead costs without the opportunity to earn money from their services.
Moreover, any businesses selling items abroad have buyers that are wary of their products. There is a general fear for anything that comes from China. The assumption is that it may infect people with the Coronavirus.
The owner of Wing Sang Electrical shared that hair straighteners and blow dryers are two products whose foreign sales have dropped.
This hits businesses particularly hard since the on-going US-China trade war has already had its effect. China businesses may not have the leeway to accept these missed opportunities again.
On Foreign Economies
The economic effect of the Coronavirus has spread to other countries as well.
For instance, foreign retailers have stopped any operations they had in China. These include big businesses such as Ikea and coffee giant Starbucks.
Airlines have halted all potential flights to and from China. International hotel chains are also feeling the brunt of it. They have begun offering refunds on certain stays in China.
The biggest effect would have to be in China’s place within the world’s supply chain. China plays a big part in the production of many companies.
Recently, South Korean car company Hyundai has called a stop to the production of their cars. The stop was caused because the parts supply operation in China had some problems.
Hyundai is only one of many car companies that China plays a part in. In much the same way, China also plays a big part in cell phone and computer manufacturing. Their current fates mirror the automotive industry.
China’s stock market also fell close to 10%, while crude oil is at its lowest price in over a year. The Organization of Petroleum Exporting Countries (Opec) have met recently and are considering cutting back production numbers.
Experts are cautious about the future. It is all dependent on how well the Coronavius is contained and managed.