Coronavirus undermine the work of the 5 million companies worldwide

According to a new study, the outbreak of coronavirus and stop huge sectors of the Chinese economy could affect 5 million businesses worldwide.

the Research company Dun&Bradstreet has analysed the Chinese province most affected by the virus, and found that they are closely interconnected with the global business network.

According to the report, in the affected areas, where on February 5, was 100 or more confirmed cases, is 90% of all existing enterprises in China, and about 49 thousand enterprises in these regions are branches and subsidiaries of foreign companies.

49% of companies with subsidiaries in the affected regions have head office in Hong Kong, the US accounts for 19%, Japan — 12% and Germany — 5%.

According to the National Commission of health of China, as of Monday in the country more than 70 thousand confirmed cases of infection with coronavirus, 1770 died.

Researchers from Dun&Bradstreet found that at least 51 thousand companies worldwide, 163 of which are in the Fortune 1000, have one or more direct first-tier suppliers in the affected region. At least 5 million — 938 of which are in the Fortune 1000 — have one or more suppliers of the second level.

the Impact on business in China and around the world reduces the economic growth forecasts for the year.

Moody’s has revised its forecasts for global growth by two tenths of percentage points, expecting that the economies of G-20 countries will grow with an annual growth rate of 2.4% in 2020, and China’s growth will drop to 5.2%.

It makes you rely on a baseline forecast in which the spread of the coronavirus will stop at the end of the first quarter, “normal economic activity” will be able to recover in the second quarter. However, the global economic damage will be “serious”, if morbidity and mortality are not reduced, and disruptions in internationaldischarge the supply chain will intensify.

“Already there is evidence that supply chains are disrupted, including those outside of China. Also, stopping certain segments of the economy in China will have a global impact, given the importance of the country and its relationship with the global economy,” said Vice President Moody’s Madhavi Bokil.

the report Dun&Bradstreet indicates that the five main sectors that account for work 80% of businesses in areas affected by the coronavirus, has been services, wholesale trade, manufacturing, retail trade and financial services.

Experts Dun&Bradstreet suggests that a large part of the Chinese labour market, and sales depend on the companies in the affected region.

coronavirus-affected provinces such as Guangdong, Jiangsu, Zhejiang, Beijing and Shandong accounted for 50% of total employment and 48% of total sales.

the Chinese economy is 20% of world GDP. And according to analysts, if the virus outbreak will keep it only in the summer, the consequences will lead to the fact that global GDP growth will stay at 1 p. p.

“no matter which scenario is realized, in the region Hubei, China and world economy has been an outflow of representatives of the business segment and weak growth of employment and income in the nearest future”, — stated in the message of the company.

“When will be able to isolate the coronavirus, is bound to recover, economic activity, consumers satisfy pent-up demand as soon as conditions improve. The amount of efforts to revive the region will return the global economy on a sustainable growth path”.