5 lakh Companies Shut Shop in China in 2020 Q1

The pandemic Coronavirus has severely damaged China as it lost nearly half a million firms due to the lockdown. Geopolitical tensions also loom over the Dragonland as US and other nations accuse it of cover-up and opaqueness in disseminating information. Complete Coverage: Coronavirus

Crux of the Matter

China Losing Limbs China, the first epicentre of Coronavirus, has faced a great deal of damage in the business and industry sector. Due to Coronavirus, 4,60,000 firms shut down operations in the first quarter of 2020. More than half of them have merely operated for 3 years. In addition, only 3.2 million new firms were opened in the first quarter which is 29% less than the previous year. 

Recovery in the manufacturing industry in China won’t be easy even though the threat of Coronavirus is relatively less there. Its industry may not pick up healthy growth because many countries are on the verge of economic crisis, resulting in a huge slump in the external demand of products. China’s overseas shipment fell 17.2% compared to last year. 

1. 
   

Performance of Chinese Stock Exchange SSE and US’ Dow Jones

Looming Geopolitical Risks Geopolitics is likely to alter due to the COVID-19 pandemic. The strain on US-China relations due to the US-China Trade War may exacerbate due to the Coronavirus crisis. But will the US put sanctions on China at a time when others have put a ban on the export of medical equipment, as US imports medical equipment from the latter? The US has accused China of poorly handling the critical situation of Coronavirus. Even if the US and its allies pass any resolution against China in the UN Security Council, China can simply nullify it using its veto power. In the past when the US and its allies filed a suit at the International Court of Justice against China for building artificial islands in south china sea, China simply ignored the verdict of the International Court and continued its expansion in international water.

Curiopedia

1. Due to manufacturing units being shut, carbon emission in China has significantly come down. In the 3 week period of February when China shut down its manufacturing units, dip in carbon emission was equal to almost 150 Million Metric Tons.

2. Shanghai Stock Exchange has seen a decrease of almost 400 points in the past 3 months.

3. In 2015 only, China had 28,01,143 factories compared to 2,74,407 factories in the US.

Curated Coverage

1. Forbes – Coronavirus Emergency Hits Japan, And 460,000 Chinese Companies Go Bust

2. Reuters – China’s factory activity seen recovering in March, but still in contraction after virus shock

3. News18 – Conspiracy or Otherwise, Nations May Soon Redefine Ties with China in View of Coronavirus Outbreak

#China #Coronavirus #Economy