The isolation of China amid the corona-virus outbreak is rippling globally. The virus has infected over 14,500 people, which in turn, has disrupted global trade and supply chains depressed asset prices, and forced multinationals for making hard decisions with limited information. The US and the government of Europe and Asia are enforcing new regulations for blocking visitors from China, while major airlines suspended flights to the country and companies have pulled out expatriate executives.
Apple Inc. announced that it will close all of its stores and corporate offices in China through Feb. 9. The company employing around 10,000 people in China is also contending with work stoppages by factories that produce components for the products it sells across the globe.
Levi Strauss & Co. opened its biggest China store in the city of Wuhan is one of the international brands that together have closed thousands of outlets around the country, that include McDonald’s Corp. and Starbucks Inc., in part to comply with government requests for people to remain off the streets.
In addition, sagging demand for crude oil, which has stumbled 16% in price since China identified the deadly virus, is prompting Saudi Arabia, the de facto leader of the Organization of the Petroleum Exporting Countries (OPEC), to push other members to convene an emergency meeting on February 5, 2020, said by the OPEC officials.
China is the biggest oil importer of the globe, and two big Saudi customers, including China National Chemical Corp. and Hengli Petrochemical, have decided to reduce their purchases, according to an oil trader and a Persian Gulf oil official. Moreover, JLC Network Technology Co., Beijing-based energy consultancy reported a 15% drop in refinery use over the past week alone. Chinese markets dropped sharply since January 23, 2020. The benchmark Shanghai Composite fell 8.1%. Retail, consumer services, and transportation stocks led the declines. The Shenzhen Composite dropped 8.6%.
Moreover, financial institutions, pharmaceutical giants, and technology multinationals have started to evacuate their workforces from throughout China. While other countries have started relocating staffers from China for three to six months.
The heavily indebted economy of China has long been slowing.
