Economic impact of the NCP

No time to be an optimist

As I mentioned early about the economic impact of the NCP coronavirus, it could be dramatic. Despite all the positive messages from the Chinese government, in the sense that “the economy will fully bounce back when the epidemic is under control”, one has to be naive to believe it.
First of all, no reliable forecast when it WILL be under control.
Some health experts have expressed hope that the number of new coronavirus cases will peak in the coming weeks despite uncertainty over its transmissions.

The aerosol debate

One much debated issue is the possible transmission through “airborne particles and aerosols”. In Beijing, Feng Luzhao, from the Chinese Centre for Disease Control and Prevention, sought to dispel fears that aerosol transmission – the mixing of the virus with droplets in the air to form aerosols – was a way of contracting the illness. “At present, the main methods of transmission are by droplets and through contact … There is no evidence that the coronavirus can spread through aerosol transmission,” Feng said. (reported by SCMP)

See this “warning” circulating in China:
About the possibility of aerosol transmission (Expat Focus, Hangzhou)

My take: not convinced about the so-called danger, except in areas with lots of infected people transiting. At home I don’t want to know about it. I have no visitors, no “central air conditioning”. I just take my own precautions and occasionally clean the floors with some Dettol in the water.

It’s around the world

The economic repercussions are already felt outside of China.
Hotels in France and other locations that are normally overflowing with tourists are suddenly deserted. Sales in the duty free shops are to plummet, knowing that the Chinese buy like half of the luxury products in the world. As for now, without any forecast when that will end, all organized tourist tours from and to China are stopped.
As many as 140 million Chinese citizens travel abroad every year spending US$250 billion. Expect a huge drop.
Airlines suffer massively and fire pilots and other staff (or put on unpaid leave).
Look at all the tourist spots that will see their Chinese invasions disappear.

Worst in China

Strict quarantine measures and transport lockdowns to contain the spread have brought China’s industry to a virtual standstill.
With all the draconian measures restricting travel, even locally, tourism in China is becoming a disaster industry.

It also affects all the small shops and restaurants that are asked to close. Those people lose all their income and can’t cope with it. Many have to pay high rents and salaries. A major KTV in Beijing is firing 200 staff. Many restaurants and bars fire their staff and won’t pay salaries despite the “obligation” ordered by the authorities. Only foreign-owned enterprises will try to obey – until they go bust.

During Spring Festival many Chinese were counting on making big money, in the entertainment, food & beverage, local markets and all. They got zilch.

Restart activities?

China tries to get back to work amid coronavirus outbreak on today Monday 10 February.
Major cities across China are preparing for the return of millions of workers after an extended holiday, but as the coronavirus outbreak continues to rage, opinions are mixed on the safest approach.
Ministry of Commerce said in Beijing on Sunday that companies were “encouraged to resume business on the basis of sound preparation against the pandemic”.
Central and local governments are trying to balance the need to control the outbreak, boost supplies for frontline medics and minimize the impact on the economy.

More about the economic issues to follow.


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