Like all epidemics, the Coronavirus also has had a huge negative effect on health sector and human life as a whole; the virus originated in China which is the biggest economy in the world bar the USA, it was also one of the fastest-growing economies in the world with its economy growing by 6.1% in 2019.
After the outbreak, China and the global economy has slowed down; in fact, most of the factories and economic activities in mainland China have been shut down due to the outbreak. As of March 11, 2020, more than 119,220 cases have been confirmed worldwide, among which around 4,300 have died, and 66,564 have recovered.
China is the worst affected country, and Italy is the second most affected after reporting a huge surge in confirmed cases. Both countries have effectively been shut off by their governments and have reported huge falls in the stock market.
Economic Impact In China, The Epicenter Of The Coronavirus
The epidemic started after the SARS-CoV-2 was found in may people who recently visited a bustling market in Wuhan, China.
After this, the disease spread across the Hubei province, and many experts believe that the Coronavirus most likely transferred from a bat, snake, or pangolin after a human host consumed it.
The Chinese government took the step of shutting down the city and barring entry from any place into the region to try and control the spread of the virus. This meant huge economic cutbacks in the region and a huge slowdown in the Chinese economy.
Economic Effect Of The Epidemic In Wuhan
Wuhan is an industrial region in China and has always been known for manufacturing goods exported all over the world, it has also been at the forefront of the modern industrial evolution as smart technology became one of the most desirable industries in the world.
Some of the major industries in Wuhan include the automotive industry, high tech mechanical and electric manufacturing, steel industries, etc.
In addition to this, the city also has a special zone dedicated to the manufacture and research of various machinery and electrical goods, called the Wuhan East Lake High-tech Development Zone.
All of these factories and industries have been shut off as workers and citizens stay at home. The city has been sealed by officials, but President Xi Jinping visited Wuhan in a bid to show the control of the spread of the virus.
Stock market figures show that the Chinese stock has taken a plunge. In fact, the stock market has taken one of its biggest nosedives since the 2008 recession.
Shenzhen and Shanghai Stock Exchange (SSE) have also taken huge negative hits due to the epidemic. The SSE has somewhat stabilized after a small downfall, but it is yet to achieve its high growth in recent years.
Economic Effect On USA Amidst Trade War With China
Tensions were high as it is between the USA and China after the USA, and POTUS Donald Trump announced a trade war with China introducing high tariffs on various goods imported to China, including a major export of Wuhan, steel.
Unlike the Soviet Union era, global economies have become an intertwined economy meaning the world economy has taken a huge hit.
National US conglomerates like Apple have factories in China and their products have also been affected by the closedown of factories in China.
According to a CNBC report, experts have predicted that the global economy will suffer a recession in growth rates especially.
On March 9, wall street took one of its biggest market plunges since the 2008 housing crisis.
Additionally, US politics has also made for a bad case from Coronavirus of the slowdown as millions of workers lack healthcare and sick days as per the current law which means an uncontrolled outbreak will further negatively affect the US economy.
CNN reports that US stocks fell around 7 % before coming to a halt, similarly, The Dow Jones fell around 2,046 points. Nasdaq also plunged around 5.4 %.