Department of Humanities and Culture,
Hoso Daigaku, Wakaba, Mihama-ku,
Can a virus cause economic slowdown? The answer is simply, yes. More than two dozens countries are affected by Corona virus which started spreading from Wuhan, China. Many multinational companies were forced to shut down or partly cut their operations across the globe. A Japanese food chain, ‘Izakaya’ has announced to shut all of its outlets in mainland China as only a few customers are turning to their restaurants. Hyundai, an other company in Korea has announced to curtails its productions. Philipines, Thailand and Indonesia are the other countries which are severely affected by this epidemic.
Tourism is most affected sector due to the Corona virus. Many tour operators have cancelled their bookings and several countries have suspended issuing Visa to Chinese citizens. Several flights are already restrained flying to China and businesses are hampered. The GDP growth for China has been predicted to be below 5% and a panic is emerging due to all this. It will pull down the global economy particularly nations dependent on Chinese economy will be affected the most, including Japan.
The prices of masks in Tokyo have surged many fold and out of stock in the city. Even the online stores are not able to meet the supply. Several cities in China are are facing self lockdown and economic activities are not happening at all due to the fear. “Coronavirus will have a larger negative effect on the global economy than the SARS outbreak in 2003,” IHS Markit wrote, adding that China accounted for 4.2% of the global economy in 2003. The report says China now commands 16.3% of the world’s GDP. “Therefore, any slowdown in the Chinese economy sends not ripples but waves across the globe”, cites CNBC.
As number of deaths have crossed more than one thousand in China mainland, the panic is spreading among business communities. The sales of Nissan motors dropped to around 18% in China. This is a clear sign of the impact of the virus on economy. Similar impacts can easily be found in neighboring countries like Philippines, Singapore, Thailand, Malaysia and Japan too. A Japanese taxi driver in 80s died recently and number of infected persons in Cruise ship Diamond Princess is gradually increasing. If it will spread further the Japanese economy may be shaken. Though there is no direct threat to forthcoming Olympic games but if the outbreak continues it will pose a potential threat to organize the games.
The Corona virus outbreak has burdened the global economy and hampered the business movement severely. China being an economic giant affecting the global businesses. Many companies, particularly in aviation sector and tourism are the most hit. The Guardian has reported that, Ikea has closed all of its 30 stores in China, while McDonalds shut about 300 restaurants, 10% of its network in the country, and Starbucks has shut about half of its 4,100 cafes. This just a tip of the iceberg. As there is no effective control to spread the virus, the future of global economy is still in limbo.