Coronavirus as a challenge to the global economy

China's coronavirus outbreak can seriously damage the world economy, RISS expert Mikhail Belyaev believes. He recalled that Hubei’s provincial capital of Wuhan, the place where the coronavirus outbreak had emerged, was one of the main centers of China's economic development. He warned that China's economic growth would slow to 1%, if not to prevent the viral disease from spreading.

This forecast does not inspire optimism in that regard, Belyaev considers. In addition to the devastating damage to the economy, the virus may also hit some industries. At first, tourism will suffer. A lot of countries have already undertaken several measures and suspended the flow of Chinese tourists in order to exclude the possibility of getting infected. Then the transport sector, which is an important component of the world economy, will be hit. Coronavirus can also cause financial difficulties for those Chinese companies that are engaged in active online trading. Some countries may also use fight against epidemic as a pretext to deal a more severe blow to China’s economy, Belyaev points out.

"It should be noted that China has promptly taken all necessary and emergency measures to stop the virus spreading. Beijin has imposed a quarantine, restricted road traffic in the country, started building a new 1,000-bed hospital, and allocated nearly $3 billion to contain the epidemic," he said.

"If China's economic growth decreases (China's economy had a tendency towards a gradual decline even before the virus spreading), this will have an immense impact both on the world economy and China's foreign economic relations, as foreign trade still requires people's direct presence. It is quite possible that the economic forecasts for China and other countries that have the closest economic ties with Beijin will be unfavorable," RISS expert concluded.

China coronavirus