SupChina illustration by Derek Zheng
Chinese financial and commodity markets plunged last week Monday after the World Health Organization declared the 2019-nCoV outbreak a public health emergency the week before.
The timing of the epidemic, which coincided with the Spring Festival holiday, has had a particularly brutal impact on China’s food and beverage industry. Although share prices recovered a little through the week, investors and entrepreneurs remain nervous.
Today was the first day back at work after an extended Lunar New Year holiday for many companies, but through the end of last week, as much as 80% of China’s economy remained in shutdown mode because of virus containment measures. Xi reportedly emphasized that “large-scale layoffs must be avoided,” according to the Financial Times (paywall).
“More than 300 Chinese companies are seeking bank loans totaling at least 57.4 billion yuan ($8.2 billion) to help to soften the impact of the coronavirus outbreak in China, two banking sources said,” per Reuters.
Foxconn, the iPhone manufacturer with factories in southern China, has not been allowed to restart its operations in many locations. TechNode summarizes the news.
We can expect things to get worse for Chinese companies and investors, perhaps much worse, before they get better. The same goes for the many multinational companies that are dependent on China as a major market or manufacturing base.