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| Coronavirus: The economic cost is rising in China and beyond | Coronavirus: The economic cost is rising in China and beyond |
| (about 16 hours later) | |
| The human cost of the coronavirus outbreak is climbing across China and beyond. The economic cost is also mounting, mainly, but not only, in China. | The human cost of the coronavirus outbreak is climbing across China and beyond. The economic cost is also mounting, mainly, but not only, in China. |
| That damage is, for the most part, not due to the virus itself so much as efforts to prevent it spreading. | That damage is, for the most part, not due to the virus itself so much as efforts to prevent it spreading. |
| There are strict restrictions on moving out of Wuhan, where the outbreak began, a city with a population of 11 million. | There are strict restrictions on moving out of Wuhan, where the outbreak began, a city with a population of 11 million. |
| The lockdown, also now extended to other parts of Hubei province, prevents business-related travel as well as the movement of goods and workers. | The lockdown, also now extended to other parts of Hubei province, prevents business-related travel as well as the movement of goods and workers. |
| Fear of the virus also means many people will choose to avoid activities they think might expose them to the risk of infection. | Fear of the virus also means many people will choose to avoid activities they think might expose them to the risk of infection. |
| So restaurants, cinemas, transport providers, hotels and shops are all quickly feeling the impact. | So restaurants, cinemas, transport providers, hotels and shops are all quickly feeling the impact. |
| And the timing of the health crisis, during the lunar New Year break, means those industries have been particularly exposed to commercial losses. | And the timing of the health crisis, during the lunar New Year break, means those industries have been particularly exposed to commercial losses. |
| The New Year holiday was extended for a few days by the national Chinese authorities and there have been longer extensions imposed by some provincial authorities, delaying the return to work for some businesses even longer. | The New Year holiday was extended for a few days by the national Chinese authorities and there have been longer extensions imposed by some provincial authorities, delaying the return to work for some businesses even longer. |
| Any delay resuming production and selling goods is likely to lead to cash-flow problems, especially for smaller operations. | Any delay resuming production and selling goods is likely to lead to cash-flow problems, especially for smaller operations. |
| Many companies will have to continue paying bills, including employees' pay. | Many companies will have to continue paying bills, including employees' pay. |
| And for manufacturers selling goods abroad, there may be some issues with buyers becoming more reluctant to buy from China. | And for manufacturers selling goods abroad, there may be some issues with buyers becoming more reluctant to buy from China. |
| Herbert Wun, who owns Wing Sang Electrical, which makes products such as hair-straighteners and blow-dryers in Guangdong province, told BBC News many companies would not have much slack to take this kind of impact, coming, as it did, on top of the US-China trade war. | |
| And the epidemic "will add to the pressure on customers trying to shift their supply chain away from China". | And the epidemic "will add to the pressure on customers trying to shift their supply chain away from China". |
| The impact is not confined to China. | The impact is not confined to China. |
| International retailers have closed operations in China - the furniture seller Ikea and the coffee shop chain Starbucks, for example. | International retailers have closed operations in China - the furniture seller Ikea and the coffee shop chain Starbucks, for example. |
| Several overseas airlines have stopped flights to China and international hotel chains have been offering refunds. | Several overseas airlines have stopped flights to China and international hotel chains have been offering refunds. |
| And beyond that, there is growing concern about integrated international supply chains. | And beyond that, there is growing concern about integrated international supply chains. |
| China has a much bigger role in these networks than it did at the time of the last major health problem that emerged from the country - the severe acute respiratory syndrome (Sars) virus 17 years ago. | China has a much bigger role in these networks than it did at the time of the last major health problem that emerged from the country - the severe acute respiratory syndrome (Sars) virus 17 years ago. |
| Hyundai, of South Korea, has suspended its car production because of problems with the supply of parts from its operation in China - an early warning sign of possible extensive disruption ahead. | Hyundai, of South Korea, has suspended its car production because of problems with the supply of parts from its operation in China - an early warning sign of possible extensive disruption ahead. |
| China is an important supplier for the global motor industry and the electronics sector. | China is an important supplier for the global motor industry and the electronics sector. |
| Many mobile phones and computers are made in China or at least have components manufactured there. | Many mobile phones and computers are made in China or at least have components manufactured there. |
| Financial markets have also felt the effect of the health crisis. | Financial markets have also felt the effect of the health crisis. |
| Stock markets around the world are lower than they were two weeks ago. China's market fell 8% on the first day of trading after the holiday. | Stock markets around the world are lower than they were two weeks ago. China's market fell 8% on the first day of trading after the holiday. |
| There has been a particularly marked impact on the prices of industrial commodities, as China is such an important buyer. | There has been a particularly marked impact on the prices of industrial commodities, as China is such an important buyer. |
| Crude oil hit its lowest level in more than a year. | Crude oil hit its lowest level in more than a year. |
| It has dropped by about 15% in the past two weeks, reflecting declining demand from China - underlined by reports the country's leading refiner, Sinopec, is cutting back. | It has dropped by about 15% in the past two weeks, reflecting declining demand from China - underlined by reports the country's leading refiner, Sinopec, is cutting back. |
| A group of oil exporting nations is considering production cuts in an effort to reverse the price fall. | A group of oil exporting nations is considering production cuts in an effort to reverse the price fall. |
| Copper is also cheaper - by about 13% over the past two weeks. | Copper is also cheaper - by about 13% over the past two weeks. |
| It is an important material for the construction industry, which is also sure to be affected in China. | It is an important material for the construction industry, which is also sure to be affected in China. |
| Many of the suppliers of these commodities are emerging and developing economies. | Many of the suppliers of these commodities are emerging and developing economies. |
| It is early days to attempt to quantify the likely economic effects. | It is early days to attempt to quantify the likely economic effects. |
| Much will depend on how well the Chinese authorities are able to contain the virus. | Much will depend on how well the Chinese authorities are able to contain the virus. |
| But some forecasters have made rather tentative efforts to put some numbers on the impact. | But some forecasters have made rather tentative efforts to put some numbers on the impact. |
| One example is the consultancy Oxford Economics which predicts the Chinese economy will grow less than 4% in the first quarter of 2020 from a year earlier. | One example is the consultancy Oxford Economics which predicts the Chinese economy will grow less than 4% in the first quarter of 2020 from a year earlier. |
| For the full year, the forecast is average growth of 5.6%. | For the full year, the forecast is average growth of 5.6%. |
| For both figures, the previous, pre-virus forecast was 6%. | For both figures, the previous, pre-virus forecast was 6%. |
| It also expects the global economy to grow slightly less - by 0.2 percentage points - than it would have done otherwise. | It also expects the global economy to grow slightly less - by 0.2 percentage points - than it would have done otherwise. |
| But Oxford Economic says this is all based on an assumption the "worst case scenario" will be avoided. So there is a risk of the economic damage turning out to be more severe. | But Oxford Economic says this is all based on an assumption the "worst case scenario" will be avoided. So there is a risk of the economic damage turning out to be more severe. |
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