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China Facing Corona

China not New Year but New Health Challenge

In an effort to slow the spread of the virus, many Lunar New Year celebrations were canceled, and the government issued travel bans4 and instituted a quarantine of millions of people, which prevents laborers from returning to work.5 The quarantine has had major effects on the labor force responsible for producing goods as well as loading and piloting the ships and planes used to transport goods all over the world.

The outbreak occurred during the Chinese Lunar New Year holiday, which took place between Jan. 25 and Feb. 4. Annually, this holiday precipitates what is considered the largest human migration on Earth over a period of about 40 days.3 Between early January and mid-February each year, hundreds of millions of Chinese people travel to visit relatives, much as Americans do during the Christmas holiday.

China’s Role in the World Economy

The SARS epidemic started in the Guangdong province in 2002 and led to 8,000 cases in 2003. During that year, the GDP of China represented 4.31% of the world GDP. By contrast, the number of detected cases of Covid-19 has already passed 80,000 and China represents about 16% of the world GDP, an almost four-fold increase. Therefore, the global economy has become substantially more interconnected, and China plays a far greater role in global output, trade, tourism and commodity markets.

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The slowdown of manufacturing in China due to the #COVID19 outbreak is disrupting world trade and could result in a $50 billion decrease in exports across global value chains, according to new UNCTAD estimates.  https://t.co/GsRbia9VRS pic.twitter.com/BVWxuirLOF— UNCTAD (@UNCTAD) March 4, 2020

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The gloomy trade report is likely to reinforce fears that China’s economic growth halved in the first quarter to the weakest since 1990.

  • Overseas shipments fell 17.2% in January-February from the same period a year earlier, customs data showed on Saturday Feb. 29, 2020, marking the steepest fall since February 2019. That compared with a 14% drop tipped by a Reuters poll of analysts and a 7.9% gain in December 2019.
  • Imports sank 4% from a year earlier, but were better than market expectations of a 15% drop. They had jumped 16.5% in December, buoyed in part by a preliminary Sino-U.S. trade deal. China ran a trade deficit of $7.09 billion for the period, reversing an expected $24.6 billion surplus in the poll.

Source: Reuters – https://www.reuters.com/ – March 6, 2020, “China January-February exports tumble, imports down as coronavirus batters trade and business”

https://chroniquecherkaoui.wordpress.com/2019/06/12/leadership-capitalist-china

https://chroniquecherkaoui.wordpress.com/2019/02/22/china-globaltrade

https://chroniquecherkaoui.wordpress.com/2019/11/12/china-globalization

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