Disclaimer: All information contained in this article is correct as of February 26, 2020.
Over the last few months, the coronavirus disease has captivated the world’s attention in both shock and illness. As of February 17th, 2020, there are over 73,000 confirmed cases of the virus spread throughout a handful of countries, the vast majority of them coming from China. With tens of thousands of confirmed cases of the illness in the last few months, we can start to take a look at the effect that the virus is and will have on China’s economy and transportation.
First, the coronavirus is causing a strain in China’s economy. The HSBC, a large bank in Hong Kong, is planning to cut about $4.5 billion in costs. With the increasing amount of political strife in Hong Kong, the outbreak only furthers the struggle of the HSBC. Furthermore, like many other companies that use parts made in China, car companies like Jaguar Land Rover, Fiat Chrysler, and Hyundai have all reported production interruptions due to the virus. Additionally, other companies such as IKEA and Starbucks have shut down their outlets in China. Not only have just companies faltered, but also the stock market has suffered. After Apple’s announcement stating that they wouldn’t quite make their sales forecast due to the outbreak, the stock market took a toll. According to the New York Times, “The S&P 500 index fell 0.3 percent. Bond yields declined, with the 10-year Treasury note yielding 1.56 percent, suggesting that investors are lowering their expectations for economic growth and inflation. Demand for oil has fallen and prices were down” (New York Times). The coronavirus is affecting thousands of people directly, by infection, but also is affecting thousands of people indirectly through its economic repercussions. Although, since the virus itself is fairly new, the economic downfall of it has not been so terrible. If the virus is contained and then eventually vanquished, it is safe to assume that the economic repercussions will be minuscule. However, considering that China is responsible for numerous companies’ manufacturing, the idea of manpower slowing down and potentially stopping the production in China is a terrifying prospect.
As of February 5th, 2020, the virus has spread to about 20 countries, causing many to panic. In 2019 alone, China had approximately 140 million tourists come into the country. This massive number proves that China has a huge market for tourism. Currently, China itself has imposed domestic travel restrictions, and other countries have followed, such as Canada, which has issued a warning to not travel to China unless it is vital. However, the US still has not banned travel to China, “The State Department on Thursday night issued an advisory telling Americans not to travel to China because of the public health threat posed by the coronavirus, as world health officials grappled with the expanding footprint of the outbreak” (Vigdor).
There is still little known about the coronavirus at this point. Although, in the last three months, there have been tens of thousands of confirmed cases, yet, the knowledge of the virus is limited. Although there have been economic drawbacks because of the virus, if it remains to be contained and then hopefully eradicated, then the world will see an increase in travel, and an overall economic boost.
Walker, Andrew. “Coronavirus: The Economic Cost Is Rising in China and Beyond.” BBC News, BBC, 6 Feb. 2020, www.bbc.com/news/business-51386575.
“New Cases in China Appear to Be Slowing.” The New York Times, The New York Times, 18 Feb. 2020, www.nytimes.com/2020/02/18/world/asia/china-coronavirus.html.
Roe, Emily, et al. “Trapped Tourists: How Is the Coronavirus Affecting Travel?” World Economic Forum, www.weforum.org/agenda/2020/02/the-coronavirus-will-hit-the-tourism-and-travel-sector-hard.
Wright, Bruce C.T. “As Coronavirus Spreads In US, Trump Reportedly Wants More African Nations On Travel Ban.” NewsOne, NewsOne, 31 Jan. 2020, newsone.com/3900163/china-coronoavirus-trump-travel-ban-african-countries/.
Vigdor, Neil. “State Department Warns Against Traveling to China Amid Coronavirus Outbreak.” The New York Times, The New York Times, 31 Jan. 2020, www.nytimes.com/2020/01/30/world/asia/Coronavirus-travel-advisory-.html