The Wide-Ranging Ways In Which The Coronavirus Is Hurting Global Business
More than a month and a half into the outbreak of a new coronavirus in China, the
country's economy is still largely in lockdown mode, stalling a global manufacturing powerhouse at the heart of nearly every industrial supply chain. As the crisis continues, businesses big and small are struggling with the disruption the pneumonia-like illness has caused, with effects reaching across the globe.
Restaurants and stores have been forcibly shut, many with paper seals to prevent owners from covertly reopening. Factory production lines are at a standstill. Hubei province, the epicenter of the outbreak, has twice extended its holiday break, keeping tens of millions at home in an effort to contain the virus. The death toll from COVID-19 now exceeds 2,000.
"If this [outbreak] drags past March, that really becomes quite bad," says Tom Rafferty, China research head at the Economist Intelligence Unit. "Then you're talking about long-term dislocation in supply chains. You're talking about a negative impact on the consumer sector, which is not temporary. And when you factor all these things and perhaps a cooling housing market, you get some pretty nasty economic data."
Even more worrying have been the dire labor shortages. China's factories normally ramp up production right after the Lunar New Year, but this year, few workers have returned. Most of China's migrant workers, who number some 300 million, remain cloistered in sealed-off villages and towns. Those who do manage to leave find themselves barred from renting places to stay near their workplaces by landlords fearful of travelers.