China is struggling with an outbreak of a new coronavirus type that has already killed 81 people and spread to several countries across the world. The virus started in the city of Wuhan and might have a negative impact on the country’s economy. Nevertheless, analysts call for calm as it’s too early to measure the overall effect on local businesses and consumers.
Economists admit that output will be hurt at least in the
short term as China implements preventive measures, including travel
restrictions and an extension of the Lunar New Year holiday.
Shanghai announced on Monday that businesses shouldn’t restart
their operations before February 9, while companies in Suzhou have been asked
to shut down operations until at least February 8.
Many analysts are comparing the current outbreak with the
Severe Acute Respiratory Syndrome (SARS), a coronavirus that also started in
China and killed about 800 people worldwide between 2002 and 2003.
Larry Hu of Macquarie Capital said
in a note to investors:
“The economy rebounded
quickly after SARS faded away. Transportation, restaurants and retail sales
were hit, but on the whole SARS was just a blip which didn't change the big
trend.”
However, the new strain of the coronavirus might be more aggressive than the previous one.