Coronavirus: Impact on the Chinese and Global Economy

[zakiyatasnim]

The outbreak of covid-19, a new coronavirus, has caused considerable fear in the global community - from mild anxiety to outright panic. The Chinese and global economies are also in a state of shock, which, according to experts, have already suffered a massive blow. At this stage, it is too early to draw conclusions about the scale of the consequences of the epidemic, as the latter is still raging. But today it is already possible to assess the trajectory of its impact on the economy.



Globalization and pandemics
When the coronavirus – known as SARS – emerged in China, it oman number data not only killed hundreds of people but also sent shivers down the spines of the global economy. The virus now spreading through China could be far more devastating.

since the SARS outbreak began in 2003. China has grown into a global factory, churning out products like the iPhone and driving demand for commodities like oil and copper. The country also boasts hundreds of millions of wealthy consumers who spend big on luxury goods, tourism, and cars. In 2003, China’s economy accounted for about 4% of global GDP; now it accounts for 16% of global output.

SARS has infected 8,098 people and killed 774. The new coronavirus, which originated in the central Chinese city of Wuhan, has killed more than 2,120 people (as of February 20) and infected more than 76,262 in at least 25 countries. Chinese officials have locked down Wuhan and several other cities, but the virus continues to spread.

“The outbreak could cause severe economic and market dislocation. But the scale of the impact will be determined by how the virus spreads and evolves, which is almost impossible to predict, and how governments respond,” said Neil Shearing, chief economist at Capital Economics.

Compounding the risk is that the world outside China has also changed since 2003. Globalization has encouraged companies to build supply chains that cross national borders, making economies more interconnected. Major central banks have relied on the methods they typically used to combat economic downturns after the 2008 financial crisis, when global debt levels were at their peak. In addition, rising nationalism could make it harder to coordinate global action if needed.