Shanghai/Beijing Company Formation
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According to BBC, most trading and logistics companies that export goods from China have reduced the number of shipments they make. This was done to prevent the spread of the virus, as several local authorities also put restrictions on these shipment providers.
According to the United Nations Conference on Trade and Development, China has seven out of 10 of the world’s busiest container ports. Shipping providers cutting back on seaborne vessels in China will threaten global supply chains.
“A closure of the world’s manufacturing hub impacts container shipping at large, as it is a vital facilitator of the intra-Asian and global supply chains,” said Peter Sand, chief shipping analyst at BIMCO. “This will affect many industries and limit demand for containerized goods transport,”
It shows that the impact is not just in China, many others will be affected. International companies like Starbucks closed down their outlets, a number of overseas airlines are not flying to China anymore, and companies are still paying salaries even though the government extended the holidays.
Are these signs of long-term business problems? Researchers still think that these impacts will only be short-lived.
When it be End
China is much more important than it was 10 or some 15 years ago back when the previous SARS epidemic happened.
China exports the bulk of the electronics, smartphone hardware, computer parts, automotive parts, construction equipment, and directly affects many other industries.
However, all of these cutbacks and losses are directly related to how in-control the government is to the entire coronavirus situation. Researchers still believe that these effects will start receding after the first quarter of 2020 – which is basically the lifecycle of the epidemic itself.
Business Continue
China received greater damage from the prevention of the disease than the disease itself. According to reports, the government will be implementing newer policies to prevent further problems. Recently, it announced newer tax incentives for foreign investors.
Furthermore, the first wholly foreign-owned insurance company was also incorporated in China recently – in an industry that was completely restricted for non-Chinese entities before. The Chinese government is on a roll to open up to foreign investment while at the same time, it works to put the entire outbreak in control.
It is clear that unless the spread of the coronavirus is controlled, there will be long-term economic consequences that might produce a greater set of problems.
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For further inquiries about investment in China, please do not hesitate to contact us at anytime anywhere by simply calling China hotline at 86-755-82148419, or emailing to susiehu@citilinkia.com.