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Coronavirus outbreak: economic impact China

Coronavirus outbreak: economic impact China

as China reels from the impact of the virus some of the worst predictions suggests that economic growth could slow by as much as four percentage points in this first quarter transport connections have been brought to a standstill theme parks and cinemas are closed with hotels restaurants and stores all taking big losses for neighboring Hong Kong already in recession after months faint-government protests the virus has delivered what might be described as the perfect economic storm the gloom has-been reflected in stock markets reopening after the Lunar New Year breaking South Korea ministers held an emergency meeting to discuss not only the health implications of the virus butts impact on the economic health of the country the government will make all-out efforts to safeguard citizen safety and minimize impact on the economy as long as this new infection poses a threat comparisons have been made with the SARS virus in 2003 that had far-reaching economic impact beyond China the difference between then and now is the size of the Chinese economy and its relationship with the global economy more trade more travel China is so much more interconnected with the rest of the world that 17 years on damage to its economy is so much more consequential and today the world economy is more vulnerable facing a global 

downturn as it did in 2003 generally global economy was was very bad and and that has affected Korea that has affected also of China now the situation is a little similar in the sense that you know low global economies tend to come down after boom in 2017 2018what's different it seems is the way China has learned from past epidemics scientifically institutionally I think China is more prepared to control the kind of epidemic China's success or otherwise will have far-reaching economic consequences for all its neighbors Rob McBride al Jazeera Seoul all right now we can speak to Patrick parrot green and the international economists at add macro joining us live from London thank you for talking to us I’ve seen a figure of 40 billion dollars as being the cost the estimated cost of the SARS outbreak in 2002 2003 is probably way too early to assess what kind of economic impact the coronavirus this coronavirus is likely to have no I mean it's it's very hard to quantify butler’s bear in mind when we're talking about how much china is bigger if you put it into hard numbers in 2003 china was a one and a half trillion dollar economy in terms of gap at the end of last year it was a for nearly a fourteen and a half trillion dollar economy it's ten times the size as a share of global GDP it was around about four percent now at sixteen percent it’s become an integral market for so many companies for example Mercedes self 30percent of their cars their BMW is almost the same the likes of Starbucks have over 4,000 stores and when you have cities closing businesses for an extra week Shanghai Hangzhou j-Jane Province these are the large prosperous areas the most dynamic areas with the highest income the most productivity and well some of that business will come back a lot of it won’t and then so I think it's when people are talking about four percent ford this quarter actually it's hard to say well actually this quarter that’s not an annualized basis that's perfectly realistic I think in terms of you know before this happened people were talking about a GDP for China this year growth of the order of five point seven five point eight percent right that number is gone all right so I mean we're we’re obviously of the Chinese economy and perhaps out of Southeast Asia is gonnatake a hit the four percent drop has-been mentioned but given that the Chinese economy is far more integrated into the global economy now there is greater a greater potential therefor contagion so the global economy is going to feel it as well absolutely in many countries in Asia or have very high dependence on tourism for example Chinese tourism to Thailand is about you know if they're 28 percent a tourist so tourism is about 12% of Thais GDP so we’re going to see that plummet Australia because of its commodity exports has a very very high exposure to China and then even on the European sides I mentioned before the likes of BMWMercedes and and also that we've seen the luxury goods the LVMH is of this world suffer because China again is such large area of sales for them so it’s the general repercussions and we look at the European economy which is barely struggling along growing at less than 1%the US economy has started slow and so this is a big difference of 2003 when Wesaw a global economy was January in an uptrend anyway so it was largely able to brush over the sauce so I think trying to quantify how much global GDP could suffer by I personal rest notes it could shave global GDP growth by at least half percent but when you're talking about very low global GDP the World Bank is talking anybody into 2 and a half percent growth for many countries are full to that rate is and is an effective recession and I expect to see central banks come out and cut interest rates further those who have any room left to do so and equity markets and quality markets remain under pressure all right Patrick parent green thank you very much indeed for talking to us

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