4 unexpected effects of the novel coronavirus
The coronavirus epidemic is causing a domino effect around the world. Here are four unexpected ways the outbreak has gone global.
The novel coronavirus
With China producing the vast majority of the world’s tech, production of smartphones, laptops, speakers, and video game consoles is expected to drop. “The question, I guess, we have to ask ourselves as investors is how long is this effect going to happen? Is going to hit just the one quarter or two quarters and then, you know, it's going to pick up? And that was one of the concerns Apple has, right?”, Jeff Tomasulo, an investor, questions. Several fiber-optics suppliers are based in Wuhan, where the virus originated. This could slow the rollout of 5G internet.
Many European cities rely on Chinese tourism. Tourism has seen a large increase in the rate of expansion over the last several decades, but these cities have seen a steep drop in tourists since China’s ban on overseas tours in January 2020. In Beijing specifically, leaders are performing a massive lockdown and quarantine to try and prevent any further spreading of the virus.
Because of the ongoing trade war, tensions are already hot between the world’s 2 largest economies. With Chinese factories shutting down and the U.S. imposing travel restrictions, the situation could intensify, and it does not help that Beijing has not allowed a team from the U.S. Centers for Disease Control and Prevention to visit and study the virus there, yet. Washington has expressed disappointment in this decision.
China is the largest oil importer in the world. With much of the country on lockdown, demand is shrinking — which could have global implications. “There is some impact on the Chinese economy. Yet the impact is limited, short term and manageable. The epidemic will not change the positive prospects of the Chinese economy in the long term.”, Zhang Ming, a Chinese Ambassador to the E.U. explains.