Susana Muñoz is the head of VTZ’s Chinese Desk, and she resides in Hong Kong, China, promoting bilateral trade and investment projects. Ms. Muñoz has prepared the following economic report regarding the Coronavirus outbreak. Download the report in PDF in the following link: Update Coronavirus 05022020
With a population of more than 10 million inhabitants and a GDP per capita above $ 17,000, Wuhan is one of the most important cities in central China. As the hometown of the outbreak of Coronavirus 2019-nCoV, which today has reached a figure of more than 24 thousand infected and more than 490 deaths, Wuhan remains since January 23 in quarantine and expecting a significant reduction of new cases that allow tracing the peak of the epidemic.
It was on January 26 that the Chinese authorities made the decision to extend the Chinese New Year holidays in order to reduce the movement of people and prevent contagion. Days later, this holiday period lasted until February 10, with some companies in China that have decided to start operations until February 17. The beginning of the semester in schools and universities is still to be determined, while the research centers are temporarily closed. The main centers of attraction (parks, theaters, cinemas, etc.) are focused on the public and only supermarkets, markets, and service stores are operating with reduced hours. In addition, the main trade fairs and February events throughout the country have been canceled.
In the city of Hong Kong, the situation is similar. The government is operating only some services until February 10, while it has asked public officials to work from home. Companies have also adopted this policy, and they are expected to resume operations until February 17.
In the case of schools and universities, they will remain closed until February 29.
Several airlines have suspended their flights to and from China, and the entry of Chinese nationals (including Hong Kong and Macao) and foreigners who have been in China for the past 15 days to several countries has been banned or restricted. Among the countries that have implemented these measures are the Philippines, Singapore, Australia, Israel, Italy, Mauritius, Burma, New Zealand, Sri Lanka, Taiwan, Vietnam, and the USA.
The Hong Kong government announced this week the closure of several border points and will impose a 14-day quarantine on anyone arriving from mainland China as of Saturday. For its part, Macao has announced the closure of casinos and entertainment centers for the next 15 days, in order to reduce the flow of tourists to the city.
The number of cases is expected to continue to increase until March when experts predict it will be the peak of the epidemic. It is also possible that in the next two weeks the number of cases abroad will increase, derived from the flow of Chinese tourists abroad during the past month.
Meanwhile, lower economic growth is forecast, at least during the first half of the year. Chinese authorities and companies are taking steps to keep GDP above 5%, such as extensions to credit card payments, subsidies to companies that use online platforms to market their products, exemptions of taxes and social security payments, and economic support for national airlines to continue offering national and international routes. However, a difficult start to the year is expected, mainly due to export irruptions, lower investment in the most affected cities, and lower consumption.
The Chinese Desk of VTZ will continue to work normally during these days, contacting our customers by email and answering questions.
Since the experience of Acute Respiratory Syndrome (SARS) in 2003, China has taken enormous steps in the development of medical services and research, and the inhabitants are also more prepared to face such an epidemic. Therefore, the country is in a better position than 17 years ago, and specialists predict better containment of damages.