[responsivevoice_button voice=”UK English Female” buttontext=”Listen to Post”]
Last few months have been painful not just to the Chinese economy but to the global economy. Be it the stock market or the industries across the globe, all are reeling under immense pressure amid prolonged trade war between United States and China. And now, the unexpected outbreak of coronavirus that has infected more than 20,000 people and killed more than 400 people across the world is believed to have its knock-on effects on the economies as well.
Wuhan, the place where the infection originated from, is one of the leading investment hubs for around 230 of the Fortune 500 companies. The coronavirus outbreak is believed to have severe repercussions in major economies and thus may dampen the global growth prospects.
The coronavirus infections have not only disrupted the air travel to China and many other Southeast Asian countries, but have also affected the supply chains from Southeast Asia to South America and beyond.
The tech industry is likely to feel the pinch as the US and many other countries have been dependant on China both for its market and for the supply of both subassemblies and finished goods for leading consumer product manufacturers. Particularly, the memory chip and the display markets are expected to take the hardest hit as major suppliers are located in and around Wuhan. The virus outbreak has forced several companies, including Google, to announce temporary shutdown of offices in China.
Amid lack of personnels and delay in reopening of closed offices and factories, the global semiconductors and electronics industry is likely to witness a lower production this year. The coronavirus outbreak is going to hit the smartphone manufacturers, especially Apple and many other consumer electronics producers as the widely spreading infection is expected to rattle the supply chain, affect revenue and productivity.
Same impact is expected in the automobile industry amid vehicle assembly plant shutdowns. The manufacturing plants and offices are expected to remain closed till February 10. Due to the shutdowns, the IHS Markit has estimated a loss of at least 350,000 units of vehicle production. If the plants remain shuttered till March or beyond, then there would be a larger loss.