Impact of the Coronavirus on Global Economies
Two Kenyans have recently been hospitalised at the Kenyatta National Hospital (KNH) due to the epidemic of the Wuhan Coronavirus, the East African newspaper has reported.
The hospitalised patients are those that have come from China, either from the country itself or from where it is reported that the virus has originated since December, or from Dubai.
One of the patients of who has suffered from the Corona virus (2019-nCov), a student, had come to the country aboard Kenya Airways.
In a press statement dated July 31st 2020, national carrier, Kenya Airways, reacted to the outbreak by halting flights from China to the country.
“ We have temporarily suspended all flights to and from Guangzhou, starting Friday December 31st 2020, until further notice…but our service between Nairobi and Bangkok remains operational,” states the release.
Named after the city of Wuhan, the capital city of Hubei in China, Corona virus has already led to the deaths of 361 people, citing current statistics from the Chinese National and Provincial Health Authorities, from different parts of the world, such as the United States of America (U.S.A), Europe, Asia, United Arab Emirates (U.A.E) as well as the United Kingdom. The Chinese government has extended the Lunar holiday to today, a New Year holiday that it celebrated today, to the third of February.
In China, the scare of the Wuhan coronavirus has had adverse economical effects, due to its capacity to be an industrial hub. Besides, it has an impact, considering that China is the second largest economy, states the World Bank.
The country is home to global companies such as General Motors, Nissan and Honda and the brewer from the U.S.A, Anheuser-Busch, observes Business Insider.
One of the effects is that it has scared away investors causing stock movements on the Shanghai composite index to decline by seven percent.
The last time that the index had dipped down to such a level was five years ago, but it has also prompted the Chinese central bank, the People’s Bank of China (PoBC) to supply cash to the tune of $ 173 billion, to money markets and banks that have suffered from its effects, states the Wall Street Journal.
This is not the first time that the PoBC has offered a cushion to stem the tide of such an effect.
According to the Royal Institute, the Chinese economy, the second largest in the world, had the potential of having its currency reserves from falling during the 2008 global financial crisis, which had started in the USA, owing to the downgrading of American Treasury bonds, which in turn had been helping local banks to stem the mortgage crisis.
That is when the PoBC injected 4 trillion yuan to insure the crisis.
Multinationals (MNC’s) such as Apple and Starbucks, while MNC factories have had to wait for their workers to resume work from the Lunar holiday.
Global travel has also been disrupted, with companies such as British Airways and Delta Air Lines, from the UK and USA, respectively, have had to disrupt their flights going to China, citing concerns about the health of their citizens.
This is also despite the forecasts by the World Tourism Organization (W.TO.) that global forecasts for international tourism numbers would grow to between three or four percent this year.
According to the Kenya Tourism Board (KTB), China is the largest contributor of tourists coming to the country from Asia, with 230,500 of such visitors recorded three years ago, as compared to those from India, which had 167, 200 people, during the same period.