The new Coronavirus, Impacts & Challenges

According to WHO’s reports, the outbreak of new Coronavirus in 2019–20, also known as COVID-19, has had consequences beyond the epidemic and attempts to contain it. There have been numerous reports of pharmaceutical shortages and manufactured goods in China due to factory disruption. In particular, the technology industry has been one of the most impacted industries due to delays in shipments. But first, let’s go back a little to understand how this crisis started.

Background…

The outbreak happened alongside with the Chunyun, a big Chinese New Year holiday travel season. Some precautions took effect, but as we all know now, it was already too late. National and regional governments have cancelled a variety of events attracting huge crowds, such as annual New Year festivals. Some private companies like Hong Kong and Shanghai Disneyland also separately close their stores and tourist attractions. In 24 of the 31 regions of China, authorities ordered most places of work to not reopen until further notice. These regions are responsible for 80% of the country’s GDP, and 90% of its exports.

Recession prediction…

According to a Reuters poll, China’s economic growth in the first quarter of 2020 was predicted to slow to 4.5 percent – the slowest pace since the financial crisis. Businesses are struggling with lost revenue and disrupted supply chains due to factory shutdowns in China. Millions of people living in quarantine in hundreds of towns and other countries extending travel restrictions. Early on, economic disruption from the outbreak affected the travel and tourism industries. Governments cancelled or postponed numerous trade shows and sporting events in China and across Asia.

Impacts on Global Economy…

China is the world’s second-largest economy and leading trading country. So economic fallout also challenges global growth as China wrestles with the coronavirus. With many businesses and countries relying on China’s economy’s health, here are a few ways the epidemic is causing ripples all over the world:

Declining demand for oil

China is the biggest oil importing country in the world. The International Energy Agency (IEA) has forecast the first decrease in global oil demand in a decade with coronavirus impacting manufacturing and travel. Factory shutdowns limit the speed of product and parts movement from China and impact companies all around the world.

Trade interruption

The shortage of Chinese products and parts affects businesses around the globe, as factories postponed opening after the Lunar New Year and employees stayed home to help minimize the virus spread. Apple’s Chinese manufacturing partner, Foxconn, faces a pause in production. Some car manufacturers temporarily shut down factories outside China as they were unable to procure components.

Shortage of Pharmaceuticals and Medical equipment

The international community is desperately trying to keep up as the new coronavirus spreads quickly around the world. Scientists are rushing to develop a vaccine. legislators are debating the most effective methods of containment and health care systems are straining to accommodate the increasing number of sick and dying.

A possible crisis simmers in the shadows in the middle of all this; Global reliance on China for pharmaceutical and medical equipment production. China is the main and sometimes only global source of some critical medicines’ active ingredient. For instance, china almost entirely makes the ingredients for medicines that treat breast cancer and lung cancer.

China is the largest medical device manufacturer, too. These include items like MRI equipment, surgical gowns and blood oxygen-measuring devices. The coronavirus has not yet severely disrupted supplies of these important items, but if China is no longer willing or in a position to supply them, millions of people may die.

Airlines

According to a report from the United Nations International Civil Aviation Organization (ICAO), the global airline revenues are expected to fall by $4-5 billion in the first quarter of 2020 as a result of flight cancellations.

Here are some of the airlines already terminating or decreasing services in the APAC region:

• American Airlines
• United Airlines
• British Airways
• Emirates
• Singapore Airlines
• Malaysia Airlines
• Qantas
• Virgin Australia

Product Shipment Delays

Sea shipping is the way for approximately 80 percent of world trades and China is home to seven of the world’s ten leading container ports. Shipping companies transporting products from China to the rest of the world are limiting the number of seaborne vessels, as measures to prevent the spread of the coronavirus.

Based on an IPC survey, manufacturing companies anticipate that, thanks to COVID-19, product shipments might be delayed by an average of five weeks, and some companies expect delays longer than nine weeks. This could extend deadlines for the project, which could increase costs.

In this situation, Felixtrument like all the other companies are obligated to notify our respected customers of any delays in the process of supplying their orders.

Conclusion…

Trying to figure out how to be pre-emptive in a set of issues that are linked to health issues, but can then go into supply chains, is challenging. The intensity of this outbreak as with all pandemics needs international cooperation and accountability. As the coronavirus epidemic progresses, the largest companies in the world have started painting a grim picture of disrupted supply chains, crippling production, empty warehouses, and fragile demand for their products. The dread of coronavirus has the world “on the edge of its seat,” which affects everything from industry to traveling. The influence of the virus on the global economy is evident, yet the full scale of its consequences remains to be seen.