Local media reports have suggested that the infection tally could be even higher than the latest official number. Adding to that fear and confusion, some families in China have voiced concern and frustration that their relatives’ cause of death was marked as “severe pneumonia” or “viral pneumonia” on their death certificates, The Wall Street Journal reported.
It is likely the fresh data, which measures the economic impact of Beijing’s efforts to clamp down on the virus, will further spook investors who sent global markets tumbling 11% last week in the worst seven-day period for stocks since the 2008 financial crash.
With factories forced to remain closed after the traditional lunar new year holiday shutdown, China’s official Purchasing Managers’ Index (PMI), a widely watched measure of economic activity, fell further in February than at any time in the last 12 years, China’s National Bureau of Statistics said.
The bureau found a significant collapse in domestic and export orders and a contraction of the country’s burgeoning service sector.
A global outbreak of the new strain of coronavirus (COVID-19) has put a stick in the spokes of many supply chains that rely on China’s manufacturing.
Furthermore, the trade war pushed many companies to seek to diversify their manufacturing outside of China, giving them possible venues to continue their production and limit supply chain disruption.
Last June, Apple (AAPL) asked suppliers to look into shifting the end stages of assembly from Chinese manufacturing sites. The trade tensions were getting too hot. Some reports pegged the company to potentially move between 15% and 30% Wells Fargo says that Vietnam, which has been spared so far from the coronavirus, could be a key part of ameliorating disruptions. So far, Vietnam has been the biggest foreign beneficiary in the trade war.
“Trade data from 2019 suggest U.S. firms moved away from reliance on China with Vietnam,” the note says. “The production shift may cushion the blow for U.S. manufacturers that in the past might have relied solely on China.”
Meanwhile, the outbreak will have a significant impact on the Italian economy, and likely tip it into recession. Northern Italy is the country’s economic engine, with per capita GDP of approximately €35,000 (US$38,000) – compared to the national figure of €28,000 – and a 67 per cent employment rate, against 59 per cent nationwide.
Having long been saddled with a sluggish economy – real GDP grew by just 0.2 per cent in 2019 – Italy is now faced with a recession. Along with Germany’s economic slowdown and the uncertainty of Brexit, the country’s COVID-19 affliction is further grim news for Europe.