oronavirus will have a greater impact on global trade than the US-China trade war, knocking off $26bn a week in lost exports, suggest the latest reports.
China emissions are cut by 100 million metric tonnes but trade suffers.
The weekly loss will be equivalent to a rise in the world import tariff on goods by 1 percentage point - more than the effect of the trade spat last year, which was 0.7 percentage points, calculates Euler Hermes, the company which insures payments to exporters. The effects will influence the supply and demand sidesas manufacturing production stalls, exports to China fall and travel is reduced. Germany, Hong Kong, South Korea, the US and Japan are the most exposed.
The city of Wuhan, where the virus first broke out, is one of China’s biggest industrial hubs. Several large Chinese and foreign corporations operate there
From genset manufacturers to airlines and hotels, the impact of the outbreak is having severe economic repercussions worldwide. Honda has three plants in Wuhan. Siemens has also halted its production lines here because of disruption to the supply chain of parts which usually flow between the two countries. The Japanese economy minister, Yasutoshi Nishimura, said factory production and company profits could take a hit from the virus.
Suppliers of electronic circuit boards in Wuhan said the re-opening of some factories had been indefinitely postponed by government directives. One Chinese supplier, Foxconn, is reported to have halted almost all of its Chinese production. Businesses are temporarily suspending operations and moving out employees in an attempt to limit the spread of a deadly coronavirus .
Global brands which count on the Chinese market for a sizeable chunk of sales of components are braced for a significant hit. In addition to the manufacture of goods being halted, it is likely that there will be port congestion, both landside and seaside/airside, and space is bound to be restricted and at a premium due to the backlogs being created by the reduction of capacity in the air freight market caused by the airlines withdrawing their services.
One report claims electricity demand and industrial output remain ‘far below their usual levels’after the epidemic outbreak.
According to a study published within the last few days by the Centre for Research on Energy and Clean Air (CREA) in Finland, China's carbon emissions have dropped by least 100 million metric tonnes over the past two weeks, That is nearly 6% of global emissions during the same period in 2019.
With more than 2,000 dead and around 80,000 infections across China the rapid spread of coronavirus has led to a drop in demand for coal and oil, resulting in the emissions slump, reports the UK-based Carbon Brief website said.
In the last three weeks, daily power generation at coal power plants has been recorded at a four-year low compared with the same period for 2019, while steel production has sunk to a five-year low.
Even though China is the world's biggest importer and consumer of oil, but production at refineries in Shandong province - the country's petroleum hub - fell to the lowest level since Autumn 2015, the report said.
There are, as yet, no signs of economic recovery until the Coronavirus outbreak has been completely neutralised.