What impacts have the Coronavirus outbreak brought to the China’s supply chain? | Article – HSBC VisionGo
Risks of supply chain disruption could increase with time
Coronavirus outbreak in China:Risks of supply chain disruption increase with time
The official PMIs for January released today do not yet reflect the magnitude of the economic concerns around the ongoing coronavirus 2019-nCoV outbreak in China. However, we think that its impact on the Chinese economy and the rest of the world is not negligible.
The hit to China’s GDP Y/Y growth could amount to circa 1pp, mostly over Q1 2020. A recovery should thereafter be possible, based on pent-up production and policy support.
A protracted pause in Chinese activity could be disruptive for certain supply chains such as chemicals, transport equipment, textile and electronics.
The top five economies potentially hit by this disruption are Taiwan, South Korea, the Netherlands, Hungary and Indonesia.
Table 1 - Economic context and impact of SARS and 2019-nCoV epidemics
Source: “The Impacts on Health, Society, and Economy of SARS and H7N9 Outbreaks in China: A Case Comparison Study” (Qiu, Chu, Mao, Wu, 2018), Official announcements, WHO, Euler Hermes, Allianz Research
These assessments are, as always, subject to the disclaimer provided below.
The statements contained herein may include prospects, statements of future expectations and other forward -looking statements that are based on management's current views and assumptions and involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those expressed or implied in such forward-looking statements.
Such deviations may arise due to, without l imitation, (i) changes of the general economic conditions and competitive situation, particularly in the Allianz Group's core business and core markets, (ii) performance of financial markets (particularly market volatility, liquidity and credit events), (i ii) frequency and severity of insured loss events, including from natural catastrophes, and the development of loss expenses, (iv) mortality and morbidity levels and trends, (v) persistency levels, (vi) particularly in the banking business, the extent of c redit defaults, (vii) interest rate levels, (viii) currency exchange rates including the EUR/USD exchange rate, (ix) changes in laws and regulations, including tax regulations, (x) the impact of acquisitions, including related integration issues, and reorg anization measures, and (xi) general competitive factors, in each case on a local, regional, national and/or global basis. Many of these factors may be more likely to occur, or more pronounced, as a result of terrorist act ivities and their consequences.
NO DUTY TO UPDATE
The company assumes no obligation to update any information or forward-looking statement contained herein, save for any information required to be disclosed by law.