Beyond the cost of life, the Corona epidemic is wreaking havoc on China's economy and the global economy • Damages are now estimated at tens of billions, and the final figure is expected to be much higher
Thousands of flights were canceled. Air crew wearing Hong Kong breathing masks // Photo: IP
Empty markets in Vaughan // Photo: IP
Chinese President Measures Heat // Photo: AFP
Alongside the cost in human life, the Corona epidemic is becoming an event with devastating consequences for the global economy. The plague damage is already estimated at tens of billions of dollars, and the final figure is likely to be much higher.
The main branch affected by the Corona is tourism. Once thousands of flights to China have canceled flights to the world, there is now a sharp decline in all air traffic - even on non-Far East routes. Travelers' concern about staying with hundreds of people from around the world in a crowded and closed plane has caused a wave of cancellations that is already causing huge losses.
Neal Shirring, chief economist at Capital Economist Research, told the British Guardian that Chinese passenger traffic around the world had dropped 55% over the same period last year. Since the Chinese often spend a lot of money in the countries they travel to, especially in Asia - this fact is likely to have economic consequences that exceed the borders of China.
During the 12 months between September 2019 and September 2018, approximately 173 million Chinese tourists visited foreign countries, spending a whopping $ 250 billion. This year, this figure is likely to fall drastically.
One of the tourism sectors that is particularly affected by the epidemic is the gambling industry. Macau's gambling industry in Macau, adjacent to Hong Kong, is rolling out a whopping $ 35 billion a year each year - and that figure doesn't include the indirect revenue from hotel accommodation and tourist-related spending on casinos.
New hospital in China prepares to receive coronary virus casualties // Photo: Reuters
Shortly after the beginning of the Corona epidemic, the volume of gambling in the casinos in the territory dropped by 87 percent, now completely deserted by the Chinese government's directive to close them. Also in Singapore, which is considered the second largest gambling center in Asia, casinos are experiencing a sharp decline in their activity.
At present, less than 1,000 people have died of the Corona virus - the vast majority of them in China. By contrast, by the end of winter, around 600,000 people are expected to die from the flu. However, widespread media coverage, along with the real fear of the outbreak of the epidemic and its becoming uncontrollable, are causing a very severe damage to the global economy.
In China itself, of course, the economic damage is the greatest. Carmakers across the state have disrupted factories, cafes in big cities are deserted, and ports are reporting particularly sparse traffic of ships and cargo. The Starbucks network alone operates about 4,000 branches across China, with about half of them closed since the Corona eruption began.
Corona virus continues to spread in China // Photo: Reuters
Another concern that arises is that small and medium-sized businesses, which do not enjoy significant cash reserves and depend on short-term inflows, could suffer serious injury. Many ranchers in China are also on the verge of bankruptcy, especially in the country's central region where the virus erupted, and according to some reports within a few days is expected to run out of food supplies intended for livestock.
The global oil industry is also expected to be severely affected by the crisis. China is the world's largest crude oil importer, and as a result of slowing production and shipping its goods to and from the world, global demand for oil is expected to decline, as will its price. Other sectors that will be hit are the iron and copper ore industries, which for China, too, is one of the largest markets in the world.
