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From global powerhouse to economic battleground—China’s silent struggle unfolds

 The deadly coronavirus disease, which is now officially called COVID-19, actually escaped from the seafood market in Wuhan, China, and is also the hub for China’s booming car parts and accessories exports. It is a real human tragedy as thousands got infected and hundreds lost their precious lives in multiple states after China, while numerous cities are facing lockdown as a result of the dangerous coronavirus outbreak across the world. The virus has been traced day by day since its beginning, and it is spreading so quickly that people’s lives are under threat, cases are skyrocketing, and it has not just remained limited to public health anymore, but it is hurting China’s economy as well as the world economy. The situation got more deteriorated when the Chinese Communist Party found itself more concerned with covering up the story than preventing the actual virus. 

If we go back a little in history, we come to know that back in 2002, or 18 years ago, China went through the SARS epidemic, which went on killing approximately more than 800 people, but coronavirus is considered the worst of all, as it spread to other continents too and directly showed effects on the world’s economy, which will shrink since the 2009 financial crisis, and it has also pushed China’s economy to the brink. Moreover, China works as the huge factory for global manufacturing and is always reflected as the centre of the global trade economy, having the world’s second-largest economy and being the best manufacturer of the world’s products, which accounts for 17% of global growth. Most of the highly developed MNCs rely on Chinese markets or its manufacturing or both, which is creating a disappointing scenario now and leading towards the economic downfall.

Furthermore, China is the world’s biggest exporter and second biggest importer. Its exports have been hit badly, global supply chains disrupted, factories and retail shops shut down, flights and cruises cancelled, venues closed, tourism has crashed, and oil prices are going lower because of the decreasing demands. From iPhones to LCD televisions, much of the world’s consumer technology is either made in China or relies on components that are made there. Companies like Apple, Walmart, Disney, Starbucks Coffee, McDonald’s, Adidas, Nike, IKEA, and hundreds more have run out of components. Together these hubs account for more than 80% of China’s GDP and 90% of its exports. In addition, Apple has shut down all its retail stores and factories that assemble iPhones in China, leaving its economy to face downfall. Nike has also closed its stores in China, while Disneyland was forced to close two theme parks based in Shanghai and Hong Kong. It also warned it would take a $280 million hit if the parks stay closed for two months. Cinemas present in China have also been shut down; it is to be noted that the country has the second largest movie market after the US. China’s box office revenues plunged to less than $4 million this year from $1.5 billion last year; it is also crashing because of coronavirus. Travel restrictions are already applied; twenty (20) international airlines have cancelled flights to China, and this curbs the demand for oil and international tourism.

Besides, two of the biggest commodity exporters to China, Australia and Brazil, may lose 0.3% of their GDP due to the outbreak. The world is very much reliant on the Chinese manufacturers, and this is in return making the world pay a huge price for this dependence. 

The deadly coronavirus from China is growing, and that spells trouble for the global economy. Financial markets around the world continued to tumble as countries stepped up their efforts to contain the virus by banning travel, closing schools, and postponing major sporting events and business conferences. China is much more intertwined with the world economy than ever before. Because of this, the global economy—not just China—will feel the impact of the virus. One HIS Markit report summed it all up well: “Any slowdown in the Chinese economy sends not ripples but waves across the globe.”

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