With the Lunar New Year upon us as of January 25th, China should be experiencing one of its most popular periods of tourism in 2020. Festivals, feasts, and fireworks should draw tourists and locals together, yet, in many places, the streets remain deserted and quiet.
Since its first recorded case in the city of Wuhan, China, 2019-nCoV--a coronavirus which causes pneumonia-like symptoms--has spread rapidly, with over 2,700 cases and over 80 deaths reported in China alone. Despite containment efforts by Chinese and international governments, the virus is still regarded as a viable threat, although the World Health Organization has not yet classified it as a global emergency.
Aside from its obvious impact on the daily lives of countless citizens, the Coronavirus poses a threat to the global economy. On January 23, almost a month since the virus’ initial outbreak on December 31, Shanghai Stock Exchange Composite Index stocks closed down 2.75%
Clearly, stock prices in China have already begun to show the effects of its budding health crisis. International markets have seen the same downward trends that China is experiencing, with travel companies scrambling to make up profits lost due to a halt in tourism in Wuhan, a popular travel hub, and its surrounding provinces. According to CNBC, producers of commodities such as diesel and jet fuel have experienced drops in stock prices, as have airline companies, notably United Airlines, whose stock has dropped 8.7% this week alone. Larry Hu, head of China economics at Macquarie Capital, said that the worst is yet to come seeing as 2019-nCoV is still early in its outbreak.
During the 2002 China outbreak of SARS, or Severe Acute Respiratory Syndrome, the Shanghai Stock Exchange also took a major hit; however, the Chinese economy bounced back in a matter of weeks. According to Bloomberg, analysts from countries such as Japan that rely heavily on Chinese tourism predict that the effect on their economy will be greater than that of the SARS outbreak. Given the usual increase in international travel at this time of year, the global economy is likely to suffer as a result of this health crisis.
Works Cited:
Choe, Stan. "Coronavirus is rattling stock markets: Here's why – and who's getting hit the hardest." Usatoday.com, USA TODAY, 26 Jan. 2020, www.usatoday.com/story/money/2020/01/26/coronavirus-hits-stock-markets-united-airlines-travel-stocks-drop/4581568002/. Accessed 26 Jan. 2020.
Domm, Patti. "History shows China's coronavirus impact on markets likely to be short-lived." Cnbc.com, 23 Jan. 2020, www.cnbc.com/2020/01/23/chinas-coronavirus-will-be-a-negative-for-some-markets-until-it-stops.html. Accessed 26 Jan. 2020.
Takeo, Yuko, and Yoshiaki Nohara. "Coronavirus Could Hit Japan's Economy Harder Than SARS, Say Economists." Bloomberg.com, 26 Jan. 2020, www.bloomberg.com/news/articles/2020-01-27/coronavirus-seen-hitting-japan-s-economy-harder-than-sars. Accessed 26 Jan. 2020.