SOCIO CULTURAL

AND ECONOMIC
IMPACT ON
EPIDEMIC
 Contents
1 Background

2 Political impacts

2.1 Impact on sovereignty

3 Educational impact

4 Religious impact

5 Economic impact

5.1 Financial impact

5.2 Labor market impact

5.3 Impact by market sectors

5.4 Retail sector

5.5 Restaurant sector

5.6 Science and technology

5.7 Tourism

5.8 Transportation

6 Possible long-term impacts

7 Socio-economic impact by region and country

7.1 East Asia

7.2 Other parts of Asia

7.3 Europe

7.4 North America

7.5 South America

7.6 Oceania
Socio-economic and cultural impact of the 2019–
20 coronavirus pandemic

The 2019–20 coronavirus pandemic has had far-reaching consequences beyond the spread of
the disease and efforts to quarantine it. As the pandemic has spread around the globe,
concerns have shifted from supply-side manufacturing issues to decreased business in the
services sector.

Supply shortages are expected to affect several sectors due to panic buying, increased usage of
goods to fight the pandemic, and disruption to factories and logistics in mainland China. There
have been widespread reports of supply shortages of pharmaceuticals, with many areas seeing
panic buying and consequent shortages of food and other essential grocery items. The
technology industry has been warning about delays to shipments of electronic goods.

On 25 February, it was expected that Australia, mainland China, and Hong Kong would have the
most direct economic impacts from the disruption, with Hong Kong already in a recession at
that time after a long period of ongoing protests since 2019 and Australia widely expected to be
in a recession with GDP contracting by 0.2% to 0.5% for 2020, but Morgan Stanley expects the
economy of China to grow by between 5.6% (worst-case scenario) to 5.9% for 2020. As
mainland China is a major economy and a manufacturing hub, the viral outbreak has been seen
to pose a major destabilising threat to the global economy.[needs update] Agathe Demarais of
the Economist Intelligence Unit forecast in January that markets would remain volatile until a
clearer image emerged on potential outcomes. Some analysts estimated as early as January
that the economic fallout of the epidemic on global growth could surpass that of the SARS
outbreak. Dr. Panos Kouvelis, director of "The Boeing Center" at Washington University in St.
Louis, estimates a $300+ billion impact on world's supply chain that could last up to two
years.The Organization of the Petroleum Exporting Countries reportedly "scrambled" after a
steep decline in oil prices due to lower demand from China. Global stock markets fell on 24
February 2020 due to a significant rise in the number of COVID-19 cases outside mainland
China. By 28 February 2020, stock markets worldwide saw their largest single-week declines
since the 2008 financial crisis. Global stock markets crashed in March 2020, with falls of several
percent in the world's major indices. As the pandemic spreads, global conferences and events
across technology, fashion, and sports are being cancelled or postponed. While the monetary
impact on the travel and trade industry is yet to be estimated, it is likely to be in the billions and
increasing. By 16 March, news reports emerged indicating that the effect on the United States
economy will be worse than previously thought.
Background

Movement of WTI price from 2019, with Black Monday of 2020 changes highlighted in red.

The pandemic coincided with the Chunyun, a major travel season associated with the Chinese
New Year holiday. A number of events involving large crowds were cancelled by national and
regional governments, including annual New Year festivals, with private companies also
independently closing their shops and tourist attractions such as Hong Kong
Disneyland and Shanghai Disneyland. Many Lunar New Year events and tourist attractions have
been closed to prevent mass gatherings, including the Forbidden City in Beijing and traditional
temple fairs. In 24 of China's 31 provinces, municipalities and regions, authorities extended the
New Year's holiday to 10 February, instructing most workplaces not to re-open until that date.
These regions represented 80% of the country's GDP and 90% of exports. Hong Kong raised its
infectious disease response level to the highest and declared an emergency, closing schools
until March and cancelling its New Year celebrations.

The demand for personal protection equipment has risen 100-fold, according to WHO director-
general Tedros Adhanom. This demand has led to the increase in prices of up to twenty times
the normal price and also induced delays on the supply of medical items for four to six months.

Political impacts

A number of provincial-level administrators of the Communist Party of China (CPC) were

dismissed over their handling of the quarantine efforts in Central China, a sign of discontent
with the political establishment's response to the outbreak in those regions. Some experts
believe this is likely in a move to protect Communist Party general secretary Xi Jinping from
people's anger over the coronavirus pandemic. Some commentators have suggested that
outcry over the disease could be a rare protest the CPC. Additionally, protests in the special
administrative region of Hong Kong have strengthened due to fears of immigration from
mainland China. Taiwan has also voiced concern over being included in any travel ban involving
the People's Republic of China (PRC) due to the "one-China policy" and its disputed political
status. Further afield, the treasurer of Australia was unable to keep a pledge to maintain a fiscal
surplus because of the coronavirus on the economy. A number of countries have been using the
outbreak to show their support to China, such as when Prime Minister Hun Sen of Cambodia
made a special visit to China with an aim to showcase Cambodia's support to China in fighting
the outbreak of the epidemic.

The United States president Donald Trump was criticised for his response to the pandemic. He

was accused of making several misleading or false claims, of failing to provide adequate
information, and of downplaying the pandemic's significance. Trump was also criticised for
having closed down the global health security unit of the United States National Security
Council, which was founded to prepare the government for potential pandemics. The situation
may have a negative impact on his chances of re-election in the 2020 United States presidential
election.

The Government of the Islamic Republic of Iran has been heavily affected by the virus, with at
least two dozen members (approximately 10%) of the Iranian legislature being infected, as well
as at least 15 other current or former top government officials, including the vice-president.
Advisers to Ali Khamenei and Mohammad Javad Zarif have died from the disease. The spread of
the virus has raised questions about the future survival of the regime.

Impact on sovereignty
Geoeconomics and country risk experts have insisted on the potential erosion of political and
economic sovereignty that may affect some already enfeebled countries like Italy: Edward
Luttwak has called it "the virus of truth” (interview with La7 TV aired on March 10 2020). M.
Nicolas Firzli, director of the World Pensions Council (WPC) and advisory board member at
the World Bank Global Infrastructure Facility (GIF), refers to it as “the Greater Financial Crisis”,
that will “bring to the surface pent-up financial and geopolitical dysfunctions … [many] national
economies will suffer as a result, and their political sovereignty itself may be severely eroded.” 

Educational impact
The pandemic has affected educational systems worldwide, leading to the widespread closures
of schools and universities. As of 16 March 2020, governments in 73 countries have announced
or implemented school closures, including 56 countries which closed schools nationwide and 17
countries with localised school closures. Country-wide school closures have affected over 421
million learners globally while localised school closures has put over 577 million learners
potentially at risk. According to data released by UNESCO on 10 March, school and university
closures due to COVID-19 have left one in five students out of school globally.

Economic impact

Coronavirus recession refers to an economic recession which may happen across the world

economy in 2020 due to the 2019–20 coronavirus pandemic.

Some economists suggest that China's economy may contract for the first time since the
1970s. Caixin's purchasing managers index for the services sector of China's economy fell to
26.5 in February 2020, the lowest figure recorded since the survey's advent in 2005, and car
sales dropped 86% in China in February. As the coronavirus spreads around the world, the stock
markets have experienced their worst crash since 1987.

Many countries with large economies, such as Italy and Spain, have
enacted quarantine policies. This has led to the disruption of business activities in many
economic sectors.

Financial impact

Economic turmoil associated with the coronavirus pandemic has wide-ranging and severe
impacts upon financial markets, including stock, bond, and commodity (including crude oil and
gold) markets. Major events included the Russia–Saudi Arabia oil price war that resulted in a
collapse of crude oil prices and a stock market crash in March 2020.

Labor market impact

China's coronavirus pandemic resulted in the increase in the number of urban unemployed
people by 5 million between January and February 2020. In the week ending 21 March, there
were 3.3 million jobless claims in the US, compared to 282 thousand the previous week.

Impact by market sectors

Entertainment
Cinema

The pandemic has impacted the film industry. Across the world and to varying degrees, cinemas
have been closed, festivals have been cancelled or postponed, and film releases have been
moved to future dates. As cinemas closed, the global box office dropped by billions of dollars,
while streaming became more popular and the stock of Netflix rose; the stock of film
exhibitors dropped dramatically. Almost all blockbusters to be released after the March
opening weekend were postponed or cancelled around the world, with film productions also
halted. Massive losses in the industry have been predicted.

Sports

Several major sporting events were cancelled or postponed, including:

 2019–20 Chinese Basketball Association season (suspended)

 2020 Women's Ice Hockey World Championships (cancelled)
 2020 Arctic Winter Games (cancelled)

Formula One Australian Grand Prix 2020 (cancelled)[66] with the Bahrain, Chinese ,Vietnam

Grands Prix and Azerbaijan postponed.

 UEFA Euro 2020 The 2020 edition postponed to 2021

 2021 Copa América The 2020 edition postponed to 2021
 2019–20 UEFA Champions League (suspended)
 2019–20 UEFA Europa League (suspended)

All NCAA collegiate athletic competitions for the remainder of the 2019–2020 academic year
including the 2020 College World Series and the 2020 Men's and Women's Division I basketball
tournaments (all cancelled)

 2019–20 NBA season (suspended)

 2019–20 NHL season (suspended)
 2020 Major League Baseball season (suspended)
 2019–20 Premier League (suspended, including lower divisions)
 2019–20 Bundesliga (suspended, including lower division)
 2019–20 Serie A (suspended, including lower divisions)
 2019–20 Ligue 1 (suspended indefinitely)
 2019–20 La Liga (suspended, including lower divisions)
 2020 Major League Soccer season (suspended until 10 May)
 2020 Major League Rugby season (cancelled)
 2019–20 DEL season (cancelled)[
 2020 XFL season (cancelled)
 WrestleMania 36 was moved from Raymond James Stadium to take place behind closed
doors at the WWE Performance Center
 2020 Grand National (cancelled)
  2020 Boat Race (cancelled)

Before most football divisions across Europe were either cancelled or postponed on 12–13
March 2020, matches in different countries as Bulgaria, Denmark,
France , Germany , Greece , Italy, Poland, Spain and Switzerland were either cancelled,
postponed or played behind closed doors. As of 13 March 2020, UEFA also considered to
suspend the UEFA Euro 2020 and UEFA Women's Euro 2021 as many European football
divisions could not be finished in time for the tournaments. Japanese officials suggested that
the 2020 Summer Olympics in Tokyo might have to be delayed by up to two years, although
the IOC insisted that preparations for the games would continue as planned. They were
postponed to 2021.

Television

The 2019–20 coronavirus pandemic has shut down or delayed production of television
programs in several countries.

Video games

The pandemic also affected the video game sector to a smaller degree. As the outbreak
appeared in China first, supply chains affected the manufacturing and production of some video
game consoles, delaying their releases and making current supplies scarcer. As the outbreak
and pandemic spread, several keystone trade events, including E3 2020, were cancelled over
concerns of further spread. The economic impact on the video game sector is not expected to
be as large as in film or other entertainment sectors as much of the work in video game
production can be decentralised and performed remotely, and products distributed digitally to
consumers regardless of various national and regional lockdowns on businesses and services.

Retail sector
Best Buy was only letting a limited number of people into their Union Square store in New York City, 18 March
2020

The 2019-20 coronavirus pandemic has impacted the retail sector. Retail stores across the
world have seen product demand exceeding supply for many consumables, resulting in empty
retail shelves. In Australia, the pandemic has provided a new opportunity for daigou shoppers
to re-sell into the China market. "The virus crisis, while frightening, has a silver lining". Some
retailers are looking at contactless home delivery.

Shopping centers around the world responded by reducing hours or closing down temporarily
in response. As of 18 March 2020, the footfall to shopping centers fell by up-to 30%, with
significant impact in every continent Simon Property Group became the first major US-based
mall operator to close all centers on 18 March, with government mandated closures in UAE,
Italy, Germany, Spain, Brazil and Austria as of 23 March.

In light of the public health situation in which includes afflicted regions where retail sectors
deemed non-essential in have been ordered closed for the interim, Diamond Comic
Distributors announced on March 24, 2020 full suspension of distributing published material
and related merchandise as April 1, 2020 until further notice. As Diamond has a near-monopoly
on printed comic book distribution, this is described as an "extinction-level event" that
threatens to drive the entire specialized comic book retail sector out of business with that one
move. As a result, publishers like IDW Publishing and Dark Horse Comics have suspended
publication of their periodicals while DC Comics is exploring distribution alternatives including
an increased focus on online retail of digital material.

Restaurant sector

The 2019-20 coronavirus pandemic has impacted the restaurant business. In the beginning of
March 2020, some major cities in the US announced that bars and restaurants would be closed
to sit-down diners and limited to takeout orders and delivery. Some employees were fired, and
more employees lacked sick leave in the sector compared to similar sectors. With only carry-out
and delivery services, most servers and bartenders were laid off, prompting these employees
creating "virtual tip jars" across 23 U.S. cities.

Science and technology

The pandemic has impacted productivity of science, space and technology projects, and to the
world's leading space agencies - including NASA and the European Space Agency having to halt
production of the Space Launch System, James Webb Space Telescope, and put space science
probes into hibernation or low power mode. Most of both agencies' field centers have directed
most personnel to telework

Tourism
Events and institutions impacts
The pandemic has caused major events around the world to be cancelled or postponed and
public venues and institutions to be closed.

Transportation
In many of the world's major cities, planned travel went down by 80-90%.

Aviation

A nearly empty flight from Beijing to Los Angeles during the pandemic

The pandemic has had a significant impact on the aviation industry due to the resulting travel
restrictions as well as a slump in demand among travellers. Significant reductions in passenger
numbers have resulted in planes flying empty between airports and the cancellation of flights.

United States passenger airlines can expect about $50 billion in subsidies from the $2 trillion
relief package signed into law by President Trump on 27 March 2020.

Cruise lines
Cruise lines had to cancel sailings after the outbreak of the Covid-19 pandemic. Bookings and
cancellations grew as extensive media coverage of ill passengers on quarantined ships hurt the
industry's image.

Cruise line stock fell sharply on 27 March 2020 when the $2 trillion relief package passed by the
U.S. Congress and signed by President Trump excluded companies that are not "organized"
under United States law. Senator Sheldon Whitehouse, (D-RI), tweeted: “The giant cruise
companies incorporate overseas to dodge US taxes, flag vessels overseas to avoid US taxes and
laws, and pollute without offset. Why should we bail them out?” Senator Josh Hawley (R-MO)
tweeted that cruise lines should register and pay taxes in the United States if they expect a
financial bailout. U.S-based employees and small, American-owned companies are eligible for
financial assistance.

Possible long-term impacts

The possibility has been raised that the pandemic could cause a "revolution in working from
home", as major companies have implemented expanded telecommuting arrangements for
their employees in order to prevent the virus from spreading. There could also be a negative
impact on business travel and international conferencing and the rise of their virtual
equivalents.

There have also been claims that globalisation could be jeopardised by a prolonged global

health crisis, as supply chains have been disrupted and reliance on the Chinese economy
questioned. Also, restrictions on immigration and increased border enforcement may be seen
as justified.

The pandemic may have mixed effects on the fight against climate change. Reductions in
industrial and transportation activity should reduce emissions in the short-term, while the
cheaper oil prices will make it harder for the dirtiest oil to compete. However, emissions are
expected to rebound following a possible recession. As resources are diverted from climate
action, the world's clean energy transition may be slowed down.

On 24 March 2020, German financial analyst Walter Kohl warned that, besides the medical and
economic crises that followed from the pandemic, it was likely to also lead to a currency crisis
in the Euro zone. Italy and Spain, the two EU countries most affected by the disease, still have
not fully recovered from the European debt crisis of 2014, and might need support to
avoid national bankruptcy.

Socio-economic impact by region and country

East Asia

Mainland China

The economy of China was anticipated to generate billions in economic output. Morgan

Stanley expected the economy of China to grow by between 5.6% (worst-case scenario) to 5.9%
for 2020. For reference, China generated US$143 billion in February 2019, the month of
Chinese New Year. The Chinese Ministry of Transport reported that trips on trains dropped 73%
to 190 million trips from the previous year. Factories, retailers, and restaurant chains closed.
All 70,000 theat screens in the country were shuttered, wiping out the entire box office. This is
drastically in stark difference from the week of Chinese New Year in 2019 that generated $836
million.

Though cautioning that the economic impact would be short-term, PRC National Development
and Reform Commission party secretary Cong Liang views small and medium businesses
encountering more difficulties in their operations. Human Resources and Social Security
Assistant Minister You Jun specified that agricultural workers and college graduates would have
difficulties.

Animated map showing confirmed 2019-nCoV cases spreading from 22 January (high resolution)

Tourism in China has been hit hard by travel restrictions and fears of contagion, including a ban
on both domestic and international tour groups. Many airlines have either cancelled or greatly
reduced flights to China and several travel advisories now warn against travel to China. Many
countries, including France, Japan, Australia, New Zealand, the United Kingdom and the United
States, have evacuated their nationals from the Wuhan and Hubei provinces.

The majority of schools and universities have extended their annual holidays to mid-
February. Overseas students enrolled at Chinese universities have been returning home over
fears of being infected—the first cases to be reported by Nepal and Kerala, a southern state of
India, were both of students who had returned home. Nearly 200 million students have been
affected by the in-school closures, with the second semester after the Chunyun resuming on 17
February through online classes for students to follow from their homes instead. The Ministry
of Education has introduced a 7,000-server supported "national Internet cloud classroom" to
cater to the 50 million elementary and middle school student populations.
The Finance Ministry of China announced it would fully subsidise personal medical costs
incurred by patients.

CNN reported that some people from Wuhan "have become outcasts in their own country,
shunned by hotels, neighbors and – in some areas – placed under controversial quarantine
measures."

The sale of new cars in China has been affected due to the outbreak. There was a 92%
reduction on the volume of cars sold during the first two weeks of February 2020.

On 24 February, China's Standing Committee declared an immediate and "comprehensive" ban

on its US$74 billion wildlife trade industry, citing the "prominent problem of excessive
consumption of wild animals, and the huge hidden dangers to public health and safety" that has
been revealed by the outbreak. This permanently extends the temporary ban already in place
since the end of January.

According to Carbon Brief, the coronavirus pandemic has resulted in China's greenhouse

gas emissions being reduced by 25%.In March 2020, satellite images from space provided
by NASA revealed that pollution has dropped significantly, which has been attributed in part to
the slowdown of economic activity as a result of the outbreak.

Face mask shortage

People in Wuhan lining up in front of a drug store to buy surgical masks

A notice at a supermarket in Beijing, which says each person can only buy one pack of surgical
masks and one bottle of 84 disinfectant liquid a day

As the epidemic accelerated, the mainland market saw a shortage of face masks due to the
increased need from the public. It was reported that Shanghai customers had to queue for
nearly an hour to buy a pack of face masks which was sold out in another half an hour. Some
stores are hoarding, driving up prices and other acts, so the market regulator said it will crack
down on such acts. The shortage will not be relieved until late February when most workers
return from the New Year vacation according to Lei Limin, an expert in the industry.

On 22 January 2020, Taobao, China's largest e-commerce platform owned by Alibaba Group,

said that all face masks on Taobao and Tmall would not be allowed to increase in price. Special
subsidies would be provided to the retailers. Also, Alibaba Health's "urgent drug delivery"
service would not be closed during the Spring Festival. JD, another leading Chinese e-commerce
platform, said, "We are actively working to ensure supply and price stability from sources,
storage and distribution, platform control and so on" and "while fully ensuring price stability for
JD's own commodities, JD.com has also exercised strict control over the commodities on JD's
platform. Third-party vendors selling face masks are prohibited from raising prices. Once it is
confirmed that the prices of third-party vendors have increased abnormally, JD will immediately
remove the offending commodities from shelves and deal with the offending vendors
accordingly." Other major e-commerce platforms including Sunning.com and Pinduoduo also
promised to keep the prices of health products stable.

Economy

China's economic growth is expected to slow by up to 1.1% in the first half of 2020 as economic
activity is negatively affected by the new coronavirus pandemic, according to a Morgan Stanley
study cited by Reuters.[148] But on 1 February 2020, the People's Bank of China said that the
impact of the epidemic on China's economy was temporary and that the fundamentals of
China's long-term positive and high-quality growth remained unchanged.

Due to the outbreak, the Shanghai Stock Exchange and the Shenzhen Stock

Exchange announced that with the approval of the China Securities Regulatory Commission, the
closing time for the Spring Festival will be extended to 2 February and trading will resume on 3
February. Before that, on 23 January, the last trading day of a shares before the Spring Festival,
all three major stock indexes opened lower, creating a drop of about 3%, and the Shanghai
Composite Index fell below 3000. On 2 February, the first trading day after the holiday, the
three major indexes even set a record low opening of about 8%. By the end of the day, the
decline narrowed slightly to about 7%, the Shenzhen index fell below 10,000 points, a total of
3,177 stocks in the two markets fell.

The People's Bank of China and the State Administration of Foreign Exchange have announced
that the inter-bank Renminbi foreign exchange market, the foreign currency-to-market and the
foreign currency market will extend their holiday closed until 2 February 2020. When the
market opened on 3 February, the Renminbi was now depreciating against major foreign
currencies. The central parity rate of the Renminbi against the US dollar opened at 6.9249, a
drop of 373 basis points from the previous trading day. It fell below the 7.00 than an hour after
the opening and closed at 7.0257.

Hong Kong

Hong Kong has seen high-profile protests that saw tourist arrivals from mainland China
plummet over an eight-month period. The viral epidemic put additional pressure on the travel
sector to withstand a prolonged period of downturn. A drop in arrivals from third countries
more resilient during the previous months has also been cited as a concern. The city is already
in recession and Moody has lowered the city's credit rating. The worst economic effects from
the outbreak are expected for Australia, Hong Kong and China.
There has also been a renewed increase in protest activity as hostile sentiment against
mainland Chinese strengthened over fears of viral transmission from mainland China, with
many calling for the border ports to be closed and for all mainland Chinese travellers to be
refused entry. Incidents have included a number of petrol bombs being thrown at police
stations, a homemade bomb exploding in a toilet and foreign objects being thrown onto transit
rail tracks between Hong Kong and the mainland Chinese border. Political issues raised have
included concerns that mainland Chinese may prefer to travel to Hong Kong to seek free
medical help (which has since been addressed by the Hong Kong government).

Since the outbreak of the virus, a significant number of products have been sold out across the
city, including face masks and disinfectant products (such as alcohol and bleach).[168] An
ongoing period of panic buying has also caused many stores to be cleared of non-medical
products such as bottled water, vegetables and rice. The Government of Hong Kong had its
imports of face masks cancelled as global face mask stockpiles decline.

In view of the coronavirus pandemic, the Education Bureau closed all kindergartens, primary

schools, secondary schools and special schools until 17 February. This was later extended to 1
March due to further development of the epidemic. The disruption has raised concerns over
the situation of students who are due to take examinations at the end of the year, especially in
light of the protest-related disruption that happened in 2019.

On 5 February, flag carrier Cathay Pacific requested its 27,000 employees to voluntarily take

three weeks of unpaid leave by the end of June. The airline had previously reduced flights to
mainland China by 90% and to overall flights by 30%.

Macau

On 4 February 2020, all casinos in Macau were ordered shut down for 15 days. All casinos
reopened on 20 February 2020, but visitor numbers remained low due to the pandemic, with
hotels at less than 12% occupancy at the end of February.

Japan
Shelves in a pharmacy in Japan sold out of masks on 3 February 2020

Prime Minister Shinzō Abe has said that "the new coronavirus is having a major impact on
tourism, the economy and our society as a whole". Face masks have sold out across the nation
and stocks of face masks are depleted within a day of new arrivals. There has been pressure
placed on the healthcare system as demands for medical checkups increase. Chinese people
have reported increasing discrimination. The health minister has pointed out that the situation
has not reached a point where mass gatherings must be called off 1 February 2020.

Aviation, retail and tourism sectors have reported decreased sales and some manufactures
have complained about disruption to Chinese factories, logistics and supply chains. Prime
Minister Abe has considered using emergency funds to mitigate the outbreak's impact on
tourism, of which Chinese nationals account for 40%. S&P Global noted that the worst hit
shares were from companies spanning travel, cosmetics and retail sectors which are most
exposed to Chinese tourism. Nintendo announced that they would delay shipment of
the Nintendo Switch, which is manufactured in China, to Japan.

The outbreak itself has been a concern for the 2020 Summer Olympics which is scheduled to
take place in Tokyo starting at the end of July. The national government has thus been taking
extra precautions to help minimise the outbreak's impact. The Tokyo organising committee and
the International Olympic Committee have been monitoring the outbreak's impact in Japan.[189]

On 27 February 2020, Prime Minister Shinzo Abe requested that all Japanese elementary, junior
high, and high schools close until late March, the end of the school year, to help contain the
virus. Schools will only reopen for the next term after spring break in early April and the
nationwide closures will affect 13 million students.

South Korea

Coronavirus infection prevention tips banner in Seoul

On 5 February 2020, Hyundai Motor Company was forced to suspend production in South

Korea due to shortage in supply of parts.
South Korea has been reporting increasing human-to-human community transmission of
COVID-19 since 19 February 2020, traced to a church of Shincheonji, located near the city of
Daegu. Apart from the city of Daegu and the church community involved, most of South Korea
is operating close to normality, although nine planned festivals have been closed and tax-free
retailers are closing. South Korean military manpower agency made an announcement that
conscription from the Daegu will temporarily be suspended. The Daegu Office of
Education decided to postpone the start of every school in the region by one week.

Numerous educational institutes have temporarily shut down, including dozens of

kindergartens in Daegu and several elementary schools in Seoul. As of 18 February, most
universities in South Korea had announced plans to postpone the start of the spring semester.
This included 155 universities planning to delay the semester start by 2 weeks to 16 and 22
March universities planning to delay the semester start by 1 week to 9 March. Also, on 23
February 2020, all kindergartens, elementary schools, middle schools, and high schools were
announced to delay the semester start from 2 to 9 March.

The economy of South Korea is forecast to grow 1.9%, which is down from 2.1%. The
government has provided 136.7 billion won for local governments as support. The government
has also organised the procurement of masks and other hygiene equipment.

Taiwan

Surgical masks used by people in Taiwan

Surgical masks and other medical equipment sold out in Taiwan

On 24 January, the Taiwanese government announced a temporary ban on the export of face

masks for a month in order to secure a supply of masks for its own citizens. On 2 February 2020,
Taiwan's Central Epidemic Command Center postponed the opening of primary and secondary
schools until 25 February. Taiwan has also announced a ban of cruise ships from entering all
Taiwanese ports. In January, Italy has banned flights from mainland China, Hong Kong, Macau,
and Taiwan. On 10 February, the Philippines announced it will ban the entry of Taiwanese
citizens due to the One-China Policy. Later on 14 February, Presidential Spokesperson of
Philippines, Salvador Panelo, announced the lifting of the temporary ban on Taiwan.[207] In
early February 2020 Taiwan's Central Epidemic Command Center requested the mobilisation of
the Taiwanese Armed Forces to contain the spread of the virus and to build up the defences
against it. Soldiers were dispatched to the factory floors of major mask manufacturers to help
staff the 62 additional mask production lines being set up at the time.

In the aviation industry, Taiwanese carrier China Airlines's direct flights to Rome have been
rejected and cancelled since Italy has announced the ban on Taiwanese flights. On the other
hand, the second-largest Taiwanese carrier, Eva Air, has also postponed the launch
of Milan and Phuket flights. Both Taiwanese airlines have cut numerous cross-
strait destinations, leaving just three Chinese cities still served.

Other parts of Asia

South Asia

India

In India, economists expect the near-term impact of the outbreak to be limited to the supply
chains of major conglomerates, especially pharmaceuticals, fertilisers, automobiles, textiles and
electronics. A severe impact on global trade logistics is also expected due to disruption of
logistics in mainland China, but due to the combined risk with regional geopolitical tensions,
wider trade wars and Brexit. The stock market took a bearish mode in response to COVID-19.
The BSE SENSEX fell 2919 and NIFTY 50 fell 950 points in a single day on 12 March 2020.

On 19 March 2020, the Indian government has banned the export of ventilators,
surgical/disposable masks and textile raw materials out of the country.

Sri Lanka

In Sri Lanka, research houses expect the economic impact to be limited to a short-term impact
on the tourism and transport sectors.
Southeast Asia

Among Association of Southeast Asian Nations countries, the city-state of Singapore was

forecast to be one of the worst hit countries by Maybank. The tourism sector was considered to
be an "immediate concern" along with the effects on production lines due to disruption to
factories and logistics in mainland China. Singapore has witnessed panic buying of essential
groceries, and of masks, thermometers and sanitation products despite being advised against
doing so by the Government. Prime Minister Lee Hsien Loong said that a recession in the
country is a possibility, and that the country's economy "would definitely take a hit".

Prime Minister Hun Sen of Cambodia made a special visit to China with an aim to showcase
Cambodia's support to China in fighting the outbreak of the epidemic.

Coronavirus fears lead to panic buying of essentials in Singapore

Maybank economists rated Thailand as being most at risk, with the threat of the viral
outbreak's impact on tourism causing the Thai baht to fall to a seven-month low.

In Indonesia, over 10,000 Chinese tourists cancelled trips and flights to major destinations such
as Bali, Jakarta, Bandung, etc., over coronavirus fears. Many existing Chinese visitors are
queuing up with the Indonesian authority appealing for extended stay. Panic buying has also hit
the capital city, Jakarta. As the first reported cases of COVID-19 was announced by the
government at 3 March.

In Malaysia, economists predicted that the outbreak would affect the country's GDP, trade and
investment flows, commodity prices and tourist arrivals. Initially, the cycling race event Le Tour
de Langkawi was rumoured to be cancelled, but the organiser stated that it would continue to
be held as usual. Despite this, two cycling teams, the Hengxiang Cycling Team and the Giant
Cycling Team, both from China, were pulled from participating in this race due to fear of the
coronavirus pandemic. As the outbreak situation has worsened, some of the upcoming concerts
held in the country, such as Kenny G, Jay Chou, Joey Yung, The Wynners, Super Junior,
Rockaway Festival and Miriam Yeung, were postponed to a future date, and the
upcoming Seventeen concert was cancelled.
West Asia

Saudi Arabia

On 27 February, Saudi Arabia halted travel to Mecca and Medina over coronavirus. This has

prevented foreigners from reaching the holy city of Mecca and the Kaaba. Travel was also
suspended to Muhammad's mosque in Medina. Images of the emptied ṣaḥn of the Great
Mosque of Mecca, where pilgrims are ordinarily performing the tawaf around the Kaaba, went
viral on social media.

Europe

In Spain, a large number of exhibitors (including Chinese firms Huawei and Vivo) announced

plans to pull out of or reduce their presence at Mobile World Congress, a wireless industry
trade show in Barcelona, due to concerns over coronavirus. On 12 February 2020, GSMA CEO
John Hoffman announced that the event had been cancelled, as the concerns had made it
"impossible" to host.

Owing to an increase in the demand for masks, on 1 February most masks were sold out in
Portuguese pharmacies. On 4 February, President Marcelo Rebelo de Sousa admitted that the
epidemic of the new coronavirus in China "affects the economic activity of a very powerful
economy and thus affects the world's economic activity or could affect". He also admitted the
possibility of economic upheavals due to the break in production." On 28 February, the Swiss
government has banned all public and private gatherings of more than 1,000 people until 15
March, including forcing through a cancellation of the Geneva International Motor Show.

European Commissioner for Internal Market and Services Thierry Breton has asked streaming
video services operating in the EU to reduce the amount of bandwidth used by their services in
order to preserve capacity and infrastructure. Netflix and YouTube have complied with this
request.

Germany

According to the Deutsche Bank the outbreak of the novel coronavirus / COVID-19 may

contribute to a recession in Germany.

Italy
Civil Protection volunteers carrying out health checks at the Guglielmo Marconi
Airport in Bologna, Italy

Empty shelves at the Esselunga supermarket in Bergamo, Italy

On 21 February, at least ten towns in the Lombardy and Veneto regions of Italy, with a total

population of 50,000, were locked down in quarantine procedure following an outbreak in the
town of Codogno in Lombardy. Police mandated a curfew closing all public buildings and
controlling access through police checkpoints to the so-called 'red zone' which is enforced
under penalty by fines against trespassers who are not health or supply workers. The
government of Italian Prime Minister Giuseppe Conte vowed that sending in "the armed forces"
to enforce the lockdown was within possibility. Schools and universities have been closed
throughout Northern Italy along with museums, and various festivities, concerts, sporting
events and church masses have been cancelled as of 23 February. On 4 March, these closures
were extended to all schools and universities nationwide.

Sustained panic buying of groceries has reportedly cleared out supermarkets, and several major
events were cancelled, such as the annual Carnival of Venice, along with the cancellation
of Serie A football matches on 23 February by the Sports Ministry. Concerns about the Milan
Fashion Week has led to several fashion houses declaring that they will only hold broadcast,
closed-door shows with no spectators. As of 26 February 2020, there have been 456
coronavirus cases in Italy, 190 of which have been also confirmed by the Istituto Superiore di
Sanità.
By 12 March 2020, the number of cases in Italy had risen to 15,113, including 1,016
fatalities. On 9 March 2020, Italy declared a nation-wide quarantine. Since 10 March 2020, all
residents need a special form to be allowed to leave their homes. On 11 March 2020, all shops
and businesses were closed except food shops and pharmacies.

Portugal

Due to an increase in the demand for masks, on 1 February most masks were sold out in
Portuguese pharmacies.

On 4 February, Marcelo Rebelo de Sousa, the President of the Portuguese Republic, admitted

that the epidemic of the new coronavirus in China "affects the economic activity of a very
powerful economy and thus affects the world's economic activity or could affect". He also
admitted the possibility of economic upheavals due to the break in production."

United Kingdom

Pensive shopper during the Coronavirus Covid-19 outbreak in the U.K.

On 13 February, heavy equipment manufacturer JCB announced its plan to reduce working

hours and production due to shortages in their supply chain caused by the outbreak.

On 5 March, British airline Flybe finally collapsed into administration with the loss of 2,000 jobs
after failing to secure financial support. The airline said the impact of the coronavirus pandemic
is partly to blame for its collapse. Flybe provided more than half of UK domestic flights outside
London.

North America

Canada

On 4 March, Canadian Prime Minister Justin Trudeau announced the creation of a new cabinet

committee to manage the federal response to the coronavirus disease. A week later, on 11
March, the government announced a CA$1 billion COVID-19 Response Fund that included a $50
million contribution to the World Health Organization and an additional $275 million to fund
coronavirus research in Canada.

On 13 March, the Bank of Canada lowered the overnight rate target by 50 basis points to 0.75
percent in an unscheduled rate decision citing the "negative shocks to Canada's economy
arising from the COVID-19 pandemic and the recent sharp drop in oil prices."

Mexico

The National Institute of Statistics and Geography (INEGI) said the unemployment rate in

Mexico increased from 3.6% in January 2020 to 3.7% in February 2020. The informal sector
increased to 56.3% in February compared to 56.0% in February 2019. Fewer than half of
Mexicans have paid sick leave or health care. BBVA México predicted a 4.5% economic
contraction in 2020, while analysts at Capital Economics in London argued that the government
had to do more to support the economy. They forecast a 6% contraction in 2020. HR Ratings,
Latin America’s first credit rating agency, said that the performance of the economy would
depend on the government’s response to the Covid-19 crisis.

The Mexican Stock Exchange fell to a record low on 10 March due to fears of the coronavirus
and because of falling oil prices. The Bank of Mexico (Banxico) stepped in to prop up the value
of the peso, which fell 14%. World markets are seeing falls similar to those of 1987.

The Consejo Nacional Empresarial Turístico (National Tourism Business Council, CNET) sent two
letters in March to Alfonso Romo, Chief of Staff to the President of Mexico, outlining the
importance of tourism to the economy and asking for government support for the sector.
Tourism provides 4 million jobs in Mexico, and 93% of the companies have ten or fewer
employees. Covid-19 forced the closure of 4,000 hotels (52,400 rooms) and 2,000 restaurants,
while the airline industry lost MXN $30 billion (US $1.3 billion) through March. The association
of car dealers, ADMA, predicted a decrease in domestic sales between 16% and 25% in 2020.
United States

Empty shelves from panic buying at the Sams Club in Lufkin, Texas, on 13 March 2020.

The viral outbreak was cited by many companies in their briefings to shareholders, but several
maintained confidences that they would not be too adversely affected by short-term disruption
due to "limited" exposure to the Chinese consumer market. Those with manufacturing lines in
mainland China warned about possible exposure to supply shortages.

Silicon Valley representatives expressed worries about serious disruption to production lines, as
much of the technology sector relies on factories in mainland China. Since there had been a
scheduled holiday over Lunar New Year, the full effects of the outbreak on the tech sector were
considered to be unknown as of 31 January 2020, according to The Wall Street Journal.

Cities with high populations of Chinese residents have seen an increase in demand for face
masks to protect against the virus; many are purchasing masks to mail to relatives in mainland
China, Hong Kong, and Macau, where there is a shortage of masks. As of February 2020, many
stores in the United States had sold out of masks. This mask shortage has caused an increase in
prices. By March, the many cancelled weddings caused bridal shops to convert production to
make face masks.

Universities in the United States have warned about a significant impact to their income due to
the large number of Chinese international students potentially unable to attend classes.

The Washington Post reported in February that President Donald Trump told advisors that he
did not want the government to say or do anything that might spook the stock market, on
concerns a large-scale outbreak could hurt his reelection chances.
On 26 February, The New York Times (NYT) reported a case in California which the Center for
Disease Control confirmed as the first possible community transmission of coronavirus in the
United States.

On 27 February, the NYT reported delay in diagnosis of the community transmission case in
California. A later article in the NYT on 27 February discussed a whistleblower's allegation's of
the ineptitude of preparedness at Travis Air Force Base near Fairfield, California and March Air
Reserve Base in Riverside County, California to receive possible coronavirus transmitters for
diagnosis and treatment. The same day, a report by Goldman Sachs forecast that it believes
American companies "will generate no earnings growth in 2020," wiping out an earnings
recovery that was expected for the year after "lackluster profit reports for most of 2019"

On 27 February, U.S. stocks were on their way to the largest loss for a week since 2008, and
the Dow Jones Industrial Average fell 1190 points in one day. On 28 February the average
dropped below 25000 briefly. The Dow Jones ended the week down 12.4 percent, the S&P 500
Index 11.5 percent, and the Nasdaq Composite down 10.5 percent. Stocks fell to 18,592 points
(Dow average) on 23 March after a procedural Senate vote on a coronavirus economic stimulus
bill failed for the second time in two days.

On the evening of 11 March, the National Basketball Association announced that the rest of its
season would be suspended indefinitely, and the National Collegiate Athletic
Association (NCAA) announced that its men's and women's basketball tournaments would be
played without fans. The following day, the NCAA initially announced that it would cancel the
basketball tournaments, but later that day announced that all championship events throughout
all sports would be cancelled until 2020–21.

South America

Argentina

The pandemic and the global economic and financial slowdown triggered with it arrived to
Argentina in a moment in which the country is in recession since 2018 and in a debt crisis. The
government of the brand new president Alberto Fernández is at a crucial point in ongoing talks
with its creditors in search of a restructuring of the payment of the contracted foreign debt. On
19 March 2020, Argentina declared a nation-wide quarantine.

Brazil

Two Brazilian banks predicted the deceleration of economic growth in China. UBS has reviewed
its estimations from 6% to 5.4%, while Itaú stated a reduction to 5.8%.
A representative of some of the bigger Brazilian companies of the electronics sector, Eletros,
stated that the current stock for the supply of components is enough for around 10 to 15 days.

The prices of soy-beans, oil, and iron ore have been falling. These three goods represent 30%,
24% and 21% of the Brazilian exports to China, respectively.

Oceania

Australia

Australia is expected to be one of three economies worst affected by the epidemic, along with
mainland China, and Hong Kong. Early estimations have GDP contracting by 0.2% to 0.5% and
more than 20,000 Australian jobs being lost. The Australian Treasurer, Josh Frydenberg said
that the country would no longer be able to promise a budget surplus due to the outbreak. The
Australian dollar dropped to its lowest value since the Great Recession.

The Australasian College for Emergency Medicine called for a calm and a fact-based response to
the epidemic, asking people to avoid racism, "panic and division" and the spread of
misinformation. A large amount of protective face masks were purchased by foreign and
domestic buyers, which has sparked a nationwide face masks shortage. In response to price
increases of nearly 2000%, the Pharmaceutical Society of Australia has called on these
"unethical suppliers" to keep supplies affordable.

Tourism bodies have suggested that the total economic cost to the sector, as of 11 February
2020, would be A$4.5 billion. Casino earnings are expected to fall.  At least two localities in
Australia, Cairns and the Gold Coast, have reported already lost earnings of more that
$600 million. The Australian Tourism Industry Council (ATIC) called on the Government of
Australia for financial support especially in light of the large number of small businesses
affected.

Mining companies are thought to be highly exposed to the outbreak, since sales to China
constitute 93% of the sales of Fortescue Metals, 55% of the sales of BHP, and 45% of the sales
of Rio Tinto. The iron ore shipping gauge dropped 99.9% as a result of the outbreak, and the
virus has made shipping and logistic operations of mining companies more complicated.

Agriculture is also experiencing negative effects from the outbreak, including the Australian
dairy industry, fishing industry, wine producers and meat producers. On 13 February
2020, Rabobank, which specialises in agricultural banking, warned that the agricultural sector
had eight weeks for the coronavirus to be contained before facing major losses.

The education sector is expected to suffer a US$5 billion loss according to an early government
estimate, including costs due to "tuition fee refunds, free deferral of study, realignment of
teaching calendars and student accommodation costs." The taxpayer is likely to be required to
cover the shortfall in education budgets. An estimated 100,000 students were not able to enroll
at the start of the semester. Nearly two-thirds of Chinese students were forced to remain
overseas due to visa restrictions on travellers from mainland China. Salvatore Babones,
associate professor at the University of Sydney, stated that "Australia will remain an attractive
study destination for Chinese students, but it may take several years for Chinese student
numbers to recover".

The Australian Football League (AFL) match between the St Kilda and Port Adelaide Football

Clubs, which was scheduled to be played on Sunday, 31 May at Jiangwan Stadium in Shanghai,
was transferred to Marvel Stadium in Melbourne due to concerns over the coronavirus
pandemic; this match will now be played one week later than planned, on Sunday, 7 June.

CONCLUSION

Confirmed cases of the novel coronavirus (COVID-19), which first appeared in China at the end
of last year, now exceed 115,000 as of March 10 and are likely to climb significantly higher.
While over two-thirds of the total confirmed cases are in mainland China, the vast majority of
new cases reported since February 25 have occurred outside the country. What was initially
seen as a largely China-centric shock is now understood to be a global crisis. The virus’s spread
has regrettably borne out analysts’ downside scenarios, with investors digesting the
implications of disrupted supply chains, official containment measures, and spillovers from the
real economy to financial markets. A decision by two of the world’s largest energy producers to
maintain current levels of production, despite falling energy prices, has further unnerved
investors while questions about governments’ abilities to mount an effective and coordinated
response linger. The increased uncertainty has led to financial market volatility last seen during
the global financial crisis.

The extent of the damage will depend on how quickly the virus is contained, the steps
authorities take to contain it, and how much economic support governments are willing to
deploy during the epidemic’s immediate impact and aftermath.

Early indications of COVID-19’s impact on the Chinese economy are worse than initially
forecast. Surveys of China’s manufacturing and services sector plunged to record lows in
February, automobile sales sank a record 80 percent, and China’s exports fell 17.2 percent in
January and February. The official data confirmed a widespread slowdown in economic activity
foreshadowed in low pollution levels and depressed shipping traffic, among other informal
barometers. Analysts have sharply revised down estimates of Chinese growth, with many now
predicting a drop in first quarter GDP, the first contraction since China began reporting
quarterly data in 1992. As COVID-19 spreads, China’s economic recovery will be challenged as
demand from other countries drops as they cope with the virus.

Although the outbreak appears to have slowed in China, COVID-19 and its impacts have gone
global. Infections are mounting in Europe, South Korea, Iran, the United States, and elsewhere,
with authorities implementing increasingly restrictive measures to contain the
virus. Europe and Japan are likely already in recession territory given their weak fourth quarter
performance and high reliance on trade. While the United States entered the crisis with
a tailwind, some analysts are forecasting a contraction in U.S. GDP in the second quarter.
Estimates of the global impact vary: early last week, the Organisation for Economic Co-
operation and Development (OECD) predicted that COVID-19 will lower global GDP growth by
one-half a percentage point for 2020 (from 2.9 to 2.4 percent); Bloomberg
Economics warns that full-year GDP growth could fall to zero in a worst-case pandemic
scenario.