Corona Virus

Impact

The epidemic coincided with the New Year, which marks a major festival season for the region and the busiest travel period in China. A number of events involving large crowds were cancelled by national and regional governments, including the annual New Year festival in Hong Kong, with private companies also independently closing their shops and tourist attractions such as Hong Kong Disneyland. As Mainland China is a major economy and a manufacturing hub, the viral outbreak has been seen to pose a major de stabilising threat to the global economy. Agathe Demarais of the Economist Intelligence Unit has forecast that markets will remain volatile until a clearer image emerges on potential outcomes. Some analysts have estimated that the economic fallout of the epidemic on global growth could surpass that of the SARS outbreak.
Main Land China
The travel sector has been hit hard by travel restrictions and fears of contagion, including a ban on both domestic and international tour groups.[382] Many airlines have either cancelled or greatly reduced flights to China and several travel advisories now warn against travel to China. Foreigners have been evacuated from Wuhan and Hubei province by many countries, including the United States and Japan. The majority of schools and universities have extended their annual holidays to mid-February.[384] Overseas students enrolled at Chinese universities have been returning home over fears of being infected—the first cases to be reported by Nepal and Kerala, a southern state of India, were both of students who had returned home.
Hong Kong
Hong Kong has been recovering from high-profile protests that saw tourist arrivals from Mainland China plummet over an eight-month period. The viral epidemic has however placed doubt on the ability of the travel sector to withstand a prolonged period of downturn.[citation needed] A drop in arrivals from third countries more resilient during the previous months has also been cited as a concern. The city is already in recession and Moody has lowered the city's credit rating, also stating that the government had failed to respond to "to the concerns that have contributed to the continuing protests" and that decreasing autonomy of its economic and political system from Mainland China was undermining its credentials. The worst economic effects from the outbreak are expected for Australia, Hong Kong and China. There has also been a renewed increase in protest activity as hostile sentiment against Mainland Chinese strengthens over fears of viral transmission from Mainland China, with many calling for the border ports to be closed and for all Mainland Chinese travelers to be refused entry. Incidents have included a number of petrol bombs being thrown at police stations, homemade bombs exploding in toilets, and foreign objects being thrown onto transit rail tracks between Hong Kong and the Mainland Chinese border. Political issues raised have included concerns that Mainland Chinese may prefer to travel to Hong Kong to seek free medical help (which has since been addressed by the Hong Kong government). Since the outbreak of the virus, a significant number of products have been sold out across the city, including face masks and disinfectant products (such as alcohol and bleach). An ongoing period of panic buying has also caused many stores to be cleared of non-medical products such as bottled water, vegetables and rice. The Government of Hong Kong had its imports of face masks cancelled as global face masks stockpiles decline. In view of the coronavirus outbreak, the Education Bureau closed all kindergartens, primary schools, secondary schools and special schools until 17 February. This was later extended to 1 March due to further development of the epidemic. The disruption has raised concerns over the situation of students who are due to take examinations at the end of the year, especially in light of the protest-related disruption that happened in 2019.
Japan
Shelves in a pharmacy in Japan sold out of masks on February 3rd 2020 Prime Minister Shinzo Abe has said that "the new coronavirus is having a major impact on tourism, the economy and our society as a whole". Japan has been evacuating its citizens from Hubei province in China, three of whom were confirmed to be infected with the Wuhan virus and twelve of whom have been hospitalised.[403] The first domestic local transmission of the virus was confirmed on 28 January when a tourist bus driver in Nara Prefecture became infected despite having never been to China[404] – a day later, the tour guide on the same tourist bus was also confirmed to be infected. Another tour guide who was identified whilst in South Korea as being infected, unrelated to the previous tour guide reported as infected in Nara, is suspected to have contracted the virus whilst in Japan from another person who has also been confirmed infected. The health minister has said that the situation has not reached a point where mass gathering must be called off. The epidemic is expected to have a negative impact on the economy of Japan. Mitsubishi UFJ Morgan Stanley predicts that the economic fallout of the epidemic would be worse than that of SARS since tourism plays a larger part in the current Japanese economy.[408] Economic politician Yasutoshi Nishimura also warned that the viral epidemic could have a strong impact on the Japanese economy due to disruption of logistics and factory operations. Japanese airlines have started suspending flights to China[410] and JTB, the country's largest travel agency, has cancelled all tours to China. Manufacturers, including Toyota, have halted all their production lines in Mainland China and Honda has evacuated all its staff from Wuhan. Prime Minister Abe has considered using emergency funds to mitigate the outbreak's impact on tourism, of which Chinese nationals account for 40%. S&P Global noted that the worst hit shares were from companies spanning travel, cosmetics and retail sectors which are most exposed to Chinese tourism. It is noted that increased sales of face masks and protective gear are unlikely to compensate for the economic downturn. The outbreak itself has been a concern for the 2020 Summer Olympics which is scheduled to take place in Tokyo, and due to the Olympics the country's government has been taking extra precautions to help minimise the outbreak's worst impact. The Tokyo organising committee and the International Olympic Committee have been monitoring the outbreak's impact in Japan. Chinese, or people assumed to be Chinese, have reported discrimination in Japan as Japanese people fear possible viral contagion. There have been reports that face masks have been selling out across the nation and that there has been pressure placed on the healthcare system as demands for medical checkups increase.Shops have said that their stocks are depleted within a day of new arrivals.
Australia
Australia is expected to be one of three economies worst affected by the epidemic, along with Mainland China and Hong Kong. It will cost the economy billions of dollars. Australian Treasurer Josh Frydenberg said that the country would be impacted by the events unfolding in Mainland China and that he would no longer be able to promise a budget surplus. Bloomberg opinioned it was clear that the country, a major exporter of coal to China, would certainly "take a hit". The economic cost of the coronavirus in Australia "almost wholly depends on the indirect effects of the decisions that many millions of individuals make to minimise their chance of catching the virus, and the decision of governments on how to react to the threat" according to a quotation in ABC News. PricewaterhouseCoopers estimated in late January that 20,000 jobs would be lost. China is responsible for around one-third of all exports from Australia. An estimate on the total cost to the Australian economy placed it as being "far higher" than $1 billion, a figure calculated from the cost to the tourism sector of a two-month travel ban. Shares in companies in the tourism, consumer and mining stocks "tumbled" over fears surrounding the outbreak and it is thought to have contributed to a drop in Australia's currency.
Southeast Asia
Among Association of Southeast Asian Nations countries, the city-state of Singapore was forecast to be one of the worst hit countries by Maybank. Economists have advised that the viral outbreak would have an impact on the economy of the country, but that it was too soon to provide a certain answer. The tourism sector was considered to be an "immediate concern" along with the effects on production lines due to disruption to factories and logistics in Mainland China. Singaporeans have been stocking up on face masks, themometers and sanitation products despite being advised against so by the government. Maybank economists had also rated Thailand as being most at risk, with the threat of the viral outbreak's impact on tourism has causing the Baht to fall to a seven-month low. In Malaysia, economists predict the outbreak will affect the country's GDP, trade and investment flows, commodity prices and tourist arrivals with varying degrees.[435] In Indonesia, 10000 Chinese tourists cancel trips to Bali over corona virus fears.
South Asia
India is highly dependent on trade across the Himalayas and the disruption in Mainland China could adversely impact the economy of India, especially the electronics and pharmaceutical industries, with the closure of Chinese ports having a knock-on effect on Indian logistic operations as well. Sri Lanka has warned of a short term impact on the tourism sector.
United States
The viral outbreak was cited by many companies in their briefings to shareholders, but several maintained confidence that they would not be too adversely affected by short-term disruption due to "limited" exposure to the Chinese consumer market, however those with manufacturing lines in Mainland China are warning about possible exposure to supply shortages. Silicon Valley has been fearing serious disruption to its production lines as much of the technology sector relies on factories in Mainland China. Since there had been a scheduled holiday over Lunar New Year, the full effects of the outbreak on the tech sector aren't yet known for sure.



First Page 2 3 Last Page