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Coronavirus: Delayed re-opening of China’s factories will ‘have big impact on global economy’

Further delay to the reopening of the Chinese factories closed for quarantine over the coronavirus outbreak has stoked fears over the impact to be had upon the global economy.

Across China, various provinces have posted different dates for an extended shutdown of operations and factories as the coronavirus outbreak continues to spread.

Authorities had initially said that operations could pick up again on Monday, February 10th, but a further delay has been placed on factory re-openings across different provinces. CNBC reports that even when businesses are reopened, their workers would still have to fulfil quarantine requirements of around two weeks.

Analysts have now warned that further delay is likely to deliver a big hit not just to the Chinese economy, but globally.

Last week, more than 20 provinces and other regions told businesses not to resume work before February 10th – provinces that according to CNBC accounted for more than 80 per cent of national GDP, and 90 per cent of exports.

Some of those provinces and districts have now told companies to not return to work until March 1.

The investment bank, Morgan Stanley wrote a report on Monday morning, highlighting an uncertainty over whether factories could resume production this week amid local quarantine efforts and traffic controls.

“There are still uncertainties as to how quickly the coronavirus situation will be brought under control and when production and goods transportation services will be ramped up to normal levels,” it said.

Alicia Herrero, chief economist for Asia Pacific at Natixis, added: “That… is a major blast to the global value chain, not only for China, but the world. That’s already, basically a month and a half without factories working.

“Indeed it’s a big blow to the Chinese economy, and the world.”

China Briefing has attempted to map the projected factory re-openings across the country, with dates subject to chance in accordance with Chinese authorities.

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