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Coronavirus stings global economy

06
Feb '20
Pic: Shutterstock
Pic: Shutterstock
Factory shutdowns, effect on global industry supply chains, closures of malls and retail brand outlets, the deadly coronavirus has put a halt on the ever-growing Chinese economy. The Chinese economy already suffered a setback with US bilateral trade dispute and now with the deadly stung of Coronavirus the situation seems to be getting worse.

The epicenter of the coronavirus is Wuhan, which is known as the transportation hub of China and now with transportation being blocked it is going to severely affect the export business.

The virus has infected more than 20,000 people so far, thus crippling one of the vital economic centres of the world. The situation is such worse that it has upset worldwide trade because of which the vicious supply chain is also disturbed. The business is crippled in China and the aftermath can be seen in other parts for the world. The famous Messe Frankfurt's Shanghai Textile fairs which were to be held next month, have also been postponed which further adds to the looming uncertainty.

The market players in polyester field are under great concern as business in Hubei, in Central China has paused. Polyester production is likely to see a dip this month and it could extend further if the situation is not brought under control immediately. Not only the polyester industry but all the industries related to it like paraxylene industry are going to suffer. The disruption to the polyester and textiles industry would be devastating as many textile, print and dyeing business are bunched in Central China, according to reports in global media.

The transport links have been severed, with land and water transport being stopped. If the virus spreads its tentacles to other parts, it will be a total lockdown situation. The transport paralysis will disturb the delivery of apparels and other textile products. In short, the virus outbreak will result in shortfall of both fabric and finished products. Since China has been a robust growth market for big brands, the financial impact because of the shutdown is going to be immense.

According to global newswires, Chinese stocks have nosedived as WHO declared the spread of coronavirus a global health emergency. The situation is now going to badly affect the global economy that will include the textile and retail sectors. If China bounces back quickly, it will be great for its economy as China now accounts for more than 16 per cent of global economic activity. Since the outbreak of the virus, Chinese stock markets have plunged 8 per cent, while the Chinese yuan fell over 1 per cent.

Both from global trade and societal perspectives, everyone who is in the know of the situation is wishing for a speedy improvement in the situation. The impacts are going to be worse if things continue as they are now.  

Fibre2Fashion News Desk (DD)


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