35.2 C
New Delhi
Friday 3 July 2020

Chinese patient dies in France; coronavirus impacts economy worldwide

The first death of a Chinese of coronavirus outside China is not the only concern of the world bracing for a severe impact on the economy

An elderly Chinese tourist who had been hospitalised in France has died of coronavirus, becoming the first fatality attributed to the biological agent in Europe. French health minister Agnes Buzin shared this information with the media on 15 February. Buzzin said he was informed on Friday that the 80-year-old Chinese man, who had been receiving treatment at the Bichat Hospital in northern Paris since 25 January, had died of a lung infection caused by the coronavirus.

Eleven cases of the virus have been reported in France, out of a total of 63,851 globally. Most people suffering from the virus are in China. The epidemic has killed about 1,400 people.

Outside of mainland China, some 500 countries and regions have reported about 500 cases. Until the death in France, three deaths had occurred outside China, one each in Japan, Hong Kong and the Philippines.

The real spread of the pandemic may be much greater than what the Chinese government is admitting.

Chinese not the only people affected

The coronavirus pandemic in China has shaken up the global economy. The commodity markets are feeling its cascading impact. As China is an important player in this market, the moderate economic activity in the country is disrupting the global commodity supply chain since the outbreak of the virus.

As the number of coronavirus infections grows, travel and trade across China have been affected and new restrictions on its residents have made people prisoners in their homes. Factories in many cities remain closed even after the week-long Lunar New Year holidays. Although some factories have resumed operations, many large companies are still struggling to get them fully operational.

The economic impact of the coronavirus outbreak on the Chinese economy is expected to be much worse than the outbreak of SARS in 2002–03. However, the spread of the virus outside China appeared slow. But for countries with large trade relations with China, its outbreak could adversely affect their economy.

China’s economy has recorded its slowest growth rate in several quarters due to trade disputes with the US. The threat of new viruses may further reduce its economy due to weak manufacturing and service activities. According to the latest Reuters report, China’s first-quarter GDP growth could be 5% or even lower.

The global equations had a mixed reaction to the virus outbreak, but industrial commodities have steadily declined as many Chinese factories remain inactive. The prices of iron ore, copper, aluminium, and zinc declined for a multi-month. Crude oil and natural gas prices flow dramatically on very low-cost expectations.

Since mid-January, copper prices in the LME platform declined by 9% and nickel, a commodity used to make steel, by about 7%. Lead and zinc prices weakened by 10 per cent and 7 per cent respectively. Aluminium, which is widely used in the automobile and packaging industries, sheds about 4% during the period. Meanwhile, safe-merchandise items like gold increased significantly. Similar trends were seen in the US Dollar and Japanese Yen.

Crude oil prices have fallen by more than 14% since mid-January, on hopes of lower fuel demand amid travel restrictions. Feeble industrial demand in the NYMEX platform pushed natural gas prices down 13% to a four-year low.

China’s industry-heavy economy is the world’s largest consumer of raw materials. According to reports, China is currently delaying delivery back after closing its ports or cancelling contracts.

Shipments from Australian iron ore companies now face two weeks of quarantine before being able to reload. Similarly, China is in discussions with major mining companies to delay shipments to Chinese ports. Natural gas imports from Indonesia to China from Qatar are also under pressure due to low demand for industrial fuels.

China had recently indicated additional stimulus measures in the near term to boost the economy to compensate for the current economic tariff due to the trade war. However, there is speculation that increased spending on healthcare may limit spending in other areas such as infrastructure, tourism, etc. But the world community also suspects the Chinese were preparing an agent for biological warfare, which leaked from its military laboratories.

There are others who buy the Chinese story that the virus crossed the species barrier when consumers ate animal food purchased from the Wuhan market.

Looking ahead, if the effect of coronavirus decreases, commodity prices will likely rebound to production expectations. The immediate boom in consumption, meanwhile, cannot call for a strong economic recovery as the country was already tight due to trade wars. It may take a long time for the factories to return to full speed even after commencement of operations.

Follow Sirf News on social media:

For fearless journalism

%d bloggers like this: