Less consumption, idle factories, broken global supply chains. It’s not just the Chinese economy that is suffering from the spread of the coronavirus — but the moment of truth is yet to come.
The coronavirus epidemic is spreading further in China and Chinese experts believe that it could peak in 10 to 14 days. Around 45 million people in the Chinese province of Wuhan are cut off from the outside world. In order to curb the spread of the virus, Beijing has extended the Chinese New Year holiday, and pushed back the opening of the stock markets. When it finally opened on Monday, stock prices crashed. They, however, stabilized again on Tuesday.
As a precaution, Beijing had given the financial system an unusually high injection of 1.2 trillion yuan (€156 billion, $171 billion) to keep the domestic money market and banking system functioning. In addition, import duties on goods that are important in the fight against the disease were eased.
Closed offices and factories
But it’s not only the stock markets that have been hit. Chinese consumption has also plummeted as a result of the outbreak. Large New Year’s events were canceled; tourist attractions and cinemas were closed. The doors remain closed at around 2,000 Starbucks, hundreds of McDonald’s restaurants, 130 Uniqlo shops and at all 30 Ikea stores.
The travel industry has also been badly affected. Several countries issued travel warnings about China; some airlines even suspended flights to China. Lufthansa and its subsidiaries Swiss and Austrian Airlines canceled their connections to and from Beijing until February 29. The Chinese authorities urged its own population to postpone travel abroad and prohibited domestic travel groups.
At the post office in Wuhan parcels are disinfected before they go out
Most factories and offices will remain closed this week. Several carmakers, including Volkswagen, BMW, Volvo, Toyota and Tesla, extended their annual New Year production breaks. Additionally, China’s largest oil refinery cut production by around 600,000 barrels a day due to shrinking fuel demand.
Learning from SARS
When SARS hit China 17 years ago, domestic trade suffered significantly and stock markets fell. However, the global economy is now much more interconnected and the Chinese economy is much more important. At the time China’s share of the world economy was only around 5%, today it is more than 16%.
Now the world’s second-largest economy is an important export market for German products, an important production location for German industrial companies and the starting point for many global supply chains.
In Wuhan, new emergency hospitals are going up quickly to treat patients
The ifo Institute’s economic expert Timo Wollmershäuser believes that “the economic consequences will be greater than the SARS epidemic.” That crisis, which lasted 6 months, cost China about 1% growth in gross domestic product (GDP), a number so small that it was hardly reflected in the German figures. “Since then, the country’s economic importance has grown, the infection rate is greater and the Chinese government has reacted harder,” said Wollmershäuser.
Too early for a true analysis
Many experts believe that it is too early to talk about the extent of economic consequences. Jens Hildebrandt, the director of the German Chamber of Commerce in Beijing, told DW that the country is at a practical standstill anyhow because of the Chinese New Year and spring festivities. “All factories close for three to four weeks,” he added. Thus, even under normal circumstances, the entire economy — except for the important tourism industry — would be offline.
Coronavirus: Timeline of the deadly virus in China and worldwide
Pneumonia-like virus hits Wuhan
On December 31, 2019, China notifies the World Health Organization of a string of respiratory infections in the city of Wuhan, home to some 11 million people. The root virus is unknown and disease experts around the world begin working to identify it. The strain is traced to a seafood market in the city, which is quickly shut down. Some 40 people are initially reported to be infected.
Coronavirus: Timeline of the deadly virus in China and worldwide
New strain of coronavirus identified
Researchers initially rule out the SARS virus, the deadly respiratory illness that originated in China in 2002, killing nearly 800 people worldwide. On January 7, Chinese scientists announce they’ve identified a new virus. Like SARS and the common cold, it is in the coronavirus family. It is temporarily named 2019-nCoV. Symptoms include fever, coughing, difficulty breathing, and pneumonia.
Coronavirus: Timeline of the deadly virus in China and worldwide
First death in China
On January 11, China announces the first death from the coronavirus — a 61-year-old man, who had shopped at the Wuhan market, dies from complications with pneumonia.
Coronavirus: Timeline of the deadly virus in China and worldwide
Virus reaches neighboring countries
In the following days, countries such as Thailand and Japan begin to report cases of infections in people who had visited the same Wuhan market. In China, a second fatality is confirmed in the city. By January 20, three people have died in China and more than 200 are infected.
Coronavirus: Timeline of the deadly virus in China and worldwide
Transmission unclear
Through mid-January, scientists scramble to find out how the illness is being spread among people. Coronaviruses are zoonotic, meaning they are transmitted from animals to people. Some coronaviruses can be transmitted by coughing and sneezing. Airports around the world begin screening passengers arriving from China. On January 20, officials confirm the virus can be passed directly between humans.
Coronavirus: Timeline of the deadly virus in China and worldwide
Millions under lockdown
China places Wuhan on quarantine on January 23 in an attempt to limit the spread of the virus. Transportation is suspended and workers attempt to quickly build a new hospital to treat infected patients, which total over 830 by January 24, as the death toll climbs to 26. Officials eventually extend the lockdown to 13 other cities, affecting at least 36 million people.
Coronavirus: Timeline of the deadly virus in China and worldwide
A global health emergency?
More and more cases are confirmed outside of China, including in South Korea, the US, Nepal, Thailand, Hong Kong, Singapore, Malaysia and Taiwan. As the number of infections rises, the World Health Organization on January 23 determines that it’s “too early” to declare a global public health emergency.
Coronavirus: Timeline of the deadly virus in China and worldwide
Coronavirus reaches Europe
On January 24, French authorities confirm three cases of the new coronavirus within its borders, marking the disease’s first appearance in Europe. Hours later, Australia confirms four people have been infected with the respiratory virus.
Coronavirus: Timeline of the deadly virus in China and worldwide
Lunar New Year holiday extended
The Chinese Lunar New Year begins with subdued festivities on January 25. Officials cancel many major events in a bid to contain the outbreak, as millions of Chinese travel and take part in public celebrations. By late January, 17 Chinese cities, home to more than 50 million people, are in lockdown. Lunar New Year holidays are extended by three days to limit population flows.
Coronavirus: Timeline of the deadly virus in China and worldwide
Borders with Mongolia, Hong Kong, eastern Russia close
Cambodia confirms its first case, while Mongolia shuts its border with China for cars and Russia closes its borders in three regions in the Far East. The cost to global tourism is put in the billions and oil prices also plummet. The death toll rises to 41, with over 1,300 infected worldwide — mostly in China. Scientists hope to have the first coronavirus vaccines ready within three months.
Coronavirus: Timeline of the deadly virus in China and worldwide
Germany braces for virus
On January 27, German Foreign Minister Heiko Maas says Germany is considering evacuating German nationals from Wuhan. There are no reported cases in Germany yet but officials are preparing to fight the virus. German researchers in Marburg are part of international efforts to work on a possible vaccine for the coronavirus. The death toll in China reaches 81, with 2,700 affected worldwide.
Coronavirus: Timeline of the deadly virus in China and worldwide
First cases confirmed in Germany
On January 27, Germany announces its first known case of the virus — a 33-year-old in Bavaria who contracted it during a workplace training with a visiting Chinese colleague. He is put under quarantine and observation at a Munich hospital. The following day, three of his colleagues are confirmed infected. The death toll in China reaches 132, with around 6,000 infected worldwide.
Coronavirus: Timeline of the deadly virus in China and worldwide
International evacuations begin
On January 28, Japan and the US are the first countries to evacuate some of their citizens from Wuhan. Four of the Japanese passengers are taken to the hospital with fevers on arrival. Australia and New Zealand say they will also send planes to bring their citizens home. Global cases mount to nearly 6,000 infections, more than the 2002-03 SARS outbreak that killed roughly 800 people.
Coronavirus: Timeline of the deadly virus in China and worldwide
WHO declares global health emergency
On January 30, the UN’s World Health Organization (WHO) declared coronavirus a public health emergency of international concern in a bid to protect countries with “weaker health systems.” However, WHO Secretary-General Tedros Adhanom Ghebreyesus did not recommend trade and travel restrictions, saying these would be “an unnecessary disruption.”
Coronavirus: Timeline of the deadly virus in China and worldwide
Wuhan evacuees arrive in Germany
On February 1, 124 people including 102 Germans arrived at Frankfurt airport after being evacuated from Wuhan, the epicenter of the virus, on a German Air Force flight. The evacuees were taken to military barracks in Germersheim where they were set to be quarantined for 14 days. At least two of the evacuees were said to be infected with the new virus.
Coronavirus: Timeline of the deadly virus in China and worldwide
First death outside China
The first death linked to the novel coronavirus outside of China was reported in the Philippines on February 2. A 44-year-old Chinese man had traveled from Wuhan to Manila before falling ill and being taken to hospital, where he later died of pneumonia.
Coronavirus: Timeline of the deadly virus in China and worldwide
New coronavirus hospital in just 10 days
The Huoshenshan (Fire God Mountain) Hospital in Wuhan, built in just over a week, opened on February 3. The hospital aimed to use a mix of both Western and traditional Chinese medicine to treat those infected with the coronavirus.
Author: Cristina Burack, Elliot Douglas, Dave Raish, Kate Martyr
How the coronavirus outbreak is impacting employment and ongoing production will only become apparent from next or the week after next, according to Hildebrandt, since the Chinese government has extended the holidays until February 2 and in some cities until February 9.
The reason is that a large part of the migrant workers come from the region around Wuhan, which is almost completely quarantined, says Hildebrandt. Only in the coming week will it become clear how many workers will return to the main production locations in the Shanghai and Beijing areas and in southern China, and to what extent production and thus the international supply chains will be affected by the virus.
Hitting the supply chain
“We see no signs as of now that supply chains will be completely disrupted, even if there are delays,” said Gerhard Wolf, head of foreign trade at the Association for Wholesale, Foreign Trade and Services (BGA). His credo: No need to panic.
Currently Germany’s VW Group generates about 40% of its sales with China
So far, there is no trace of panic among German companies, says Hildebrandt from the German Chamber of Commerce in Beijing. “At the moment they are acting rather calmly, though plans are being drawn up for how to deal with the situation.”
The German Institute for Economic Research (DIW) is also taking a careful approach. “It is still far too early to be able to carry out a serious analysis of the economic effects of the coronavirus,” said DIW President Marcel Fratzscher. “If the spread of the coronavirus in China and worldwide can be successfully contained, then the economic costs should be limited and be limited to a short-term loss of production in China.”
Stopping the supply chain
However, should the production stops in China last longer, the international supply chains would be at risk, warns Klaus-Jürgen Gern from the Kiel Institute for the World Economy.
“China is significant as a supplier to the rest of the world,” said Gern. A long standstill could interrupt supply chains in the chemical, automotive, textile and electronics industries, warn Allianz economists. International companies would no longer get the parts they need and would have to find other suppliers or shut down production.
One that has already been hit is the South Korean manufacturer Hyundai Motor. The company announced on Tuesday it would suspend all production in South Korea later this week. The reason for the suspension is that the cable harnesses required for production, which Hyundai usually gets from China, are just not coming.
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
