China is in isolation because of the coronavirus outbreak. It’s a rare freeze out for such an important economic center. The virus is rippling across the world.
The virus has affected more than 14,500 people. It has disrupted worldwide supply and trade chains, forced multinational businesses to make hard decisions with limited information, and depressed asset prices.
Governments in Europe, Asia, and the United States are enforcing some new regulations. They want to block visitors from China and screen returning United States citizens. Most of the significant airlines suspended flights to the country. The companies pulled out expatriate executives.
Rachel Conn is an employment attorney in San Francisco at Nixon Peabody LLP. She said that she frequently gets a call from people who don’t know what to do, that their employees are panicking. She says that people have never dealt with a situation like this.
This week Apple Inc. announced that it would close all of its corporate offices and stored in China. It will be done before February 9. The company employs 10,000 people in China. Apple Inc. is also contending with the work stoppages by factories that are producing components for the products it sells around the world.
China’s health crisis tests the entire global economic system. They are placing additional and unexpected strain on the fragility of an extended boom. Moreover, the situation is also a test of China’s strength as a consumer. It is a chance for the United States to step up while China lags.
China as the World’s Second Biggest Economy
Levi Strauss & Co. opened its biggest store in Wuhan, China, in October. The city was the center of the outbreak. Afterward, the company and other international brands closed thousands of outlets around the country, including Starbucks Inc. and McDonald’s Corp. It was partially due to the request from the government for people to remain off the streets.
Chinese factories were supposed to be quiet for a few days to celebrate Lunar New Year.
Demand for crude oil is sagging. It stumbled 16% in price since China identified the coronavirus. Thus, de facto leader of the Organization of the Petroleum Exporting Countries, Saudi Arabia wants to push other members to convene an emergency meeting Wednesday, sat the OPEC officials.
The world’s biggest oil importer is China. One of its vital oil and gas hubs is located in the city of Wuhan, where the virus emerged. Thus, two big Saudi customers, Hengli Petrochemical and China National Chemical Corp., are reducing their purchases.
Chinese markets reopened Monday morning for the first time since January 23. After the extended New Year break, the Chinese markets dropped sharply.
Tammy Krings is chief executive of ATG Travel Worldwide, who has dealt with “short and predictable” past natural disasters and terrorism scares. She said that financial institutions, technology multinationals, and pharmaceutical giants are starting to evacuate their expatriate workforces from throughout China.
On Friday, some of the companies temporarily suspended flight services to China. The companies included United Airlines Holdings Inc., American Airlines Group Inc., and Delta Air Lines Inc.
It is the economic situation of China.