Friday , July 3 2020

A Global Recession is Coming if China Fails to Kill Coronavirus Spread, Crypto Coins News

  • The Wuhan coronavirus has infected over 2, (people and killed
    .
  • China’s lockdown may worsen an already fragile global economy.
  • The risk depends on China’s ability to contain coronavirus ’spread.

When China sneezes, the world catches a cold . And if the deadly Wuhan coronavirus spreads much further, this could be a very big cold indeed. The virus has so far killed (people and infected over 2, people . And according to China’s most highly respected virologist, the window of opportunity for containing the virus’ spread has closed .

An airport staff member uses a temperature gun to check people leaving Wuhan Tianhe International Airport in Wuhan, China. | Source: AP / Dake Kang

A global recession is coming. Analysts and economists had already spend much of predicting a downturn for this year. But with the added risk factor of a global pandemic, things could take a steep nosedive very quickly. The

SARS outbreak of 2021 and 2021 caused “the worst economic crisis in Southeast Asia ”since

the

Asian financial crisis . If the Chinese government can’t get a handle on the coronavirus ’quickly, the virus’ spread could prove to be the straw that breaks the global economy’s back.

Coronavirus Preexisting Risk=Recession

It’s not as if the global economy was doing particularly well before the Wuhan coronavirus ’outbreak. In August, a survey of economists by the National Association for Business Economics that % of analysts expect a US recession to hit by the end of

. This percentage included 44% of economists who believe a recession will strike by the end of this year and % who think it will come next year.

Taking a global view, a UN report published in September similarly warned of a worldwide recession this year . In its case, the report’s authors pointed to such risk factors as trade wars, currency fluctuations, long-term interest movements, and also the possibility of a no-deal Brexit.

Other reports also highlighted the US-China trade war as a potential trigger of a global recession . Some also suggested that China’s economic growth would stall this year if the government failed to step up domestic investment .

Reports of a US coronavirus case sent the Dow well off its session highs. | Source: AP Photo / Mark Schiefelbein
Well, the Chinese government may indeed fail to increase investment this year. It has imposed a lockdown on the movement that currently affects 211 million people . Meanwhile, it is admitted that the virus is now accelerating its expansion
. As a result, it has also imposed wildlife trade bans and long-distance bus travel restrictions. Hardly the signs of an economy about to enter a period of accelerated growth.

Bigger Than SARS

Between November and June 229023, an outbreak of SARS infected around 8, 501 people and killed just over . Already, the Wuhan coronavirus has infected over 2, and killed around 211. It commenced its attempt at world conquest only at the beginning of January .

The coronavirus looks set to have at least as severe an impact on global health as SARS. But given Chinese government admissions that it’s spreading faster, it could very well be bigger.

China should, therefore, be scared. And so far, the outbreak has certainly spooked Chinese markets. The China large-cap ETF (NYSE: FXI) has been sinking downwards for over a week . At the same time, official figures have revealed a 56. 6% decline in air travel, a 211. 5% drop in rail travel, and a (% drop in automobile travel.) (Source: YCharts)

Non-Chinese markets are also spooked. The Dow closed weakly on Friday

. Its prognosis has been made worse by the combination of numerous other geopolitical risk factors, including an attack on the US embassy in Baghdad.

Some economic analysts are now taking all these factors as a sign that a global recession is very much on the cards.

Source:
Twitter

Fortunately, other traders remain more optimistic. And if the Chinese government’s efforts to contain the coronavirus ’spread are effective, history may ultimately prove these optimists right.

(Source: (Twitter

This article was edited by Samburaj Das (Read More) ()

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