For companies bracing for losses from China’s viral outbreak, the damage has so far been delayed, thanks to a stroke of timing: The outbreak hit just when Chinese factories and many businesses were closed anyway to let workers travel home for the week-long Lunar New Year holiday .
But the respite won’t last.
Ifmuch of industrial China remains on lockdown for the next few weeks — a very real possibility — Western retailers, auto companies and manufacturers that depend on Chinese imports will start to run out of the goods they depend on.
In order to meet deadlines for summer goods, retail experts say that Chinese factories would need to start ramping up production by March 15. If Chinese factories were instead to remain idle through May 1, it would likely cripple retailers’ crucial back-to-school and fall seasons.
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Fortune 4 feb
China’s coronavirus is not remotely under control and the world economy is in mounting peril. By AMBROSE EVANS-PRITCHARD
The workshop of the world is closed. China is on a total-war footing. The Communist Party has evoked the ‘spirit of 1937’ and mobilized all the instruments of its totalitarian surveillance system to fight both the Coronavirus, and the truth. Make GDP forecasts if you dare.
As of this week two-thirds of the Chinese economy remains shut. Over 80pc of its manufacturing industry is closed, rising to 90pc for exporters.
The Chinese economy is 17pc of the world economy and deeply-integrated into international supply chains. It was just 4.5pc of world GDP during the SARS epidemic 2003, which some like to use as a reassuring template. You cannot shut down China for long these days without shutting down the world.
Daily Telegraph 5 Feb
Why China’s coronavirus shutdown could spell doom for Hollywood
China has become the world’s most lucrative film market. So what happens when it closes all its cinemas?
In recent years, Chinese cinemagoers have become the film industry’s most lucrative audience.
They generate over $9 billion a year in sales, or 33 per cent of sales worldwide. The market is second only to the US, where cinema revenue is in decline, making Hollywood increasingly dependent on its international market.
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Daily Telegraph 5 Feb
Coronavirus: China unlikely to defend falling yuan, despite US trade deal pressure, analysts say
China is unlikely to take forceful measures to defend a decline in the yuan’s exchange rate in response to the novel coronavirus, in the hope that that the US will refrain from labelling Beijing a currency manipulator, analysts said.
The US-China phase one trade deal, the terms of which are slated to take effect no later than February 14, included commitments by China not to engage in competitive currency devaluation. In return, the US Treasury removed the “currency manipulator” label it had imposed on China last August.
But analysts said that Beijing may now be tempted to allow the yuan’s exchange rate to gradually depreciate to support exports in the coming weeks. Extensive government efforts to contain the coronavirus are set to cause economic growth in China to slow abruptly.
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South China Morning Post 5 Feb
