A new virus in China is threatening to spread globally and raising fears that it could eclipse the fallout from SARS 17 years ago.
Global financial markets this early are gyrating, with investors fleeing to safe investment havens like gold and the US dollar. For global traders, the coronavirus outbreak in China simply means a slowdown in the world’s second-biggest economy. Being the epicenter of the virus, China is trying to contain the spread of the disease by curbing travel outside of the country and locking down Hubei province and capital city Wuhan, the source of the virus.
The coronavirus has already killed 170 people in China and infected 1,700. Beijing has reduced air travel to and from China, leading to decreased tourists in Asia and other parts of the world. Share prices of airline companies in Asia are falling as the coronavirus takes its toll on regional tourism.
Tech giant Foxconn, the world’s biggest contract electronics maker and which assembles Apple’s iPhones and gadgets for other international brands, for instance, is suffering the brunt of the virus outbreak. Foxconn employs over one million workers in China and accounts for the most US-bound exports by volume from Hubei province.
Toyota of Japan, meanwhile, is keeping its plants in China closed until at least Feb. 9 over concerns about the coronavirus outbreak. Other foreign manufacturers are doing the same—they are cutting their Chinese operations until the crisis blows over.
Trader recall how the SARS crisis paralyzed travel in Asia and pummeled the region’s economies. The new virus couldn’t have come at a worse time. China limited the celebration of the Lunar New Year holidays when millions of Chinese spend billions of dollars.
The Philippines is not immune to the virus fallout. The arrival of Chinese tourists to the Philippines has significantly risen in the past three years and China is its biggest trading partner. Electronic products topped Philippine exports to China, where they are assembled into gadgets and mobile phone components.
The Philippines will surely catch the cold once China’s economy slows down and global trade declines. The government, thus, must take the necessary pre-emptive measures to limit the damage to the local economy.