China plays an enormously important role in the world–and the consequences of the downturn could be choppy. As per reports as of now, the coronavirus has infected nearly 40,000 people, the vast majority of whom were in China, killed over 800 and spread to nearly 30 countries. Given the enormous importance that China applies to the global economy, the ripple effect could be choppy and lasting.
China also plays a central role in a diverse array of global supply chains: many of the world’s raw materials move to China before they become a manufactured product. The long-standing trend of importing Chinese companies ‘ parts and gadgets, and the country’s large and rising domestic market, has prompted thousands of foreign firms to open their own factories on the mainland.
How this deadly virus affecting the economic activity within China?
According to Daniel Zhang, CEO of the Chinese e-commerce giant, food delivery orders have fallen year-on-year due to the large number of restaurants which remained closed as the pandemic spreads. After the Lunar New Year the CEO himself postponed returning to work
In the aftermath of chinese supply chain and supplies hitting coronavirus, Alibaba Group Holding Ltd has alerted customers about a decrease in revenues. During the earnings call for the quarter ended in December 2019 one of the company’s executives issued a warning.
A delay manufacturing of Apple’s Products
A shortage of workers means that Foxconn, which manufactures most of Apple’s iPhones in China, couldn’t get its assembly plants back to full operation this week, after the conclusion of the lunar New Year holiday. Analysts reckon that this quarter’s virus could result in Apple shipping 5-10 percent fewer iPhones and scupper its efforts to ramp up production of its famous AirPods.
Many Trade Fairs Have Been Cancelled
Some of the world’s largest trade fairs are being cancelled due to the coronavirus epidemic, from tablets to watches, flights to pants.
More and more promoters are stopping activities over concerns of contracting the life-threatening illness, with many thousands of people having to change travel plans. The highest-profile cancellation so far has been the Mobile World Congress in Barcelona, scheduled to be held at the end of this month.
BT, Ericsson, Google, Samsung, Microsoft, Sony and Vodafone were among the guests who had wanted to see the major brands. Over 100,000 people are usually drawn by the gathering, with an additional 6,000 of them coming from China.
Importantly, consumers are likely to be disappointed as they jump for a dramatic turnaround once the epidemic is contained. Choyleva points to the immense overhang of bad debts threatening the ageing state-run factories in China as a burden on development over several years.