Coronavirus disease (COVID-19) is an infectious disease caused by a new virus. The disease causes respiratory illness (like the flu) with symptoms such as a cough, fever, and in more severe cases, difficulty breathing.
China, being the world’s second-biggest economy and leading trading nation, the financial aftermath from the original COVID-19 epicentre will be critical to watch. Economists believe that the outbreak likely halved China’s economic growth in the first quarter of the year, compared with the previous three months. The Chinese economy is probably going to be hit further by decreased worldwide interest for its items because of the impact of the flare-up on economies around the globe.
China’s unemployment rate rose to 6.2% in February, compared with 5.2% in December and the highest since the official records were published. Hong Kong’s unemployment figures were also the highest in three years at 3.4%, and predicted to get worse, financial secretary Paul Chan said. In construction it rose to 5.7%, and 5.2% in tourism. New figures on February’s tourism numbers also found out Hong Kong obtained the equal number of traffic in a month that it typically noticed in a single day previous year. Almost 50 countries around the world have established travel warnings and restrictions relating to China since the start of the outbreak, and more than half include Hong Kong.
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Moreover, International retailers have closed operations in China – the furniture seller Ikea and the coffee shop chain Starbucks. Stock markets around the world are lower than they were two weeks ago. China’s market fell 8% on the first day of trading after the holiday. There has been a particularly marked impact on the prices of industrial commodities, as China is such an important buyer. The most dramatic impact has been on the energy sector, leading to a fall in oil demand in China. It has also impacted the global price of oil. The International Energy Agency predicts the overall demand will lower by about 350,000 barrels per day over 2020.
Crude oil hit its lowest level in more than a year. It has dropped by about 15% in the past two weeks, reflecting declining demand from China – underlined by reports the country’s leading refiner, Sinopec, is cutting back. A group of oil exporting nations is considering production cuts in an effort to reverse the price fall. Copper is also cheaper – by about 13% over the past two weeks. China posted a trade deficit of $7.1bn in the first two months of the year.
