“In addition to grave threats to human life, the coronavirus outbreak carries serious risks for the global economy,” UNCTAD Secretary-General Mukhisa Kituyi said.
“Any slowdown in manufacturing in one part of the world will have a ripple effect in economic activity across the globe because of regional and global value chains.”
The impacts of the coronavirus (COVID-19) are being felt along the global value chain as production slows in China, a new UNCTAD report finds.
The slowdown of manufacturing in China due to the coronavirus (COVID-19) outbreak is disrupting world trade and could result in a $US50 billion decrease in exports across global value chains, according to estimates published by UNCTAD on 4 March.
In February, the country’s manufacturing Purchasing Manager’s Index (PMI) – a critical production index – fell by about 22 points to 37.5, the lowest reading since 2004. Such a drop in output implies a 2% reduction in exports on an annual basis.
Because China has become the central manufacturing hub of many global business operations, a slowdown in Chinese production has repercussions for any given country depending on how reliant its industries are on Chinese suppliers.
According to UNCTAD estimates, the most affected sectors include precision instruments, machinery, automotive and communication equipment. Among the most affected economies are the European Union ($15.6 billion), the United States ($5.8 billion), Japan ($5.2 billion), The Republic of Korea ($3.8 billion), Taiwan Province of China ($2.6 billion) and Viet Nam ($2.3 billion).
The estimated global effects of COVID-19 are subject to change depending on the containment of the virus and or changes in the sources of supply.
Join UNCTAD and major international trade organisations, MNC's and multimodal heads across logistics & supply chain at GTDW China Trade Development Forum, June 16-18 Shanghai at a critical time for global trade collaboration.
GTDW China Trade Development Week Forum & Expo 16-18 June 2020
全球贸易发展周-中国论坛 | 2020年6月16日至18日
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