How Much Impact Does The New Crown Epidemic Have On The Global Economy

- Oct 03, 2020-

1. In the era of economic globalization, the global economy is a community, and no economy can be alone. It can be said to be both glorious and glorious


2. This epidemic is a major change in the world in a century. The first question is to find out who our common enemy is


3. The spread of the epidemic has an objective law, but timely and effective man-made measures can contain the epidemic;


4. The impact of the epidemic on the economy is comprehensive. If the economy is compared to a chain, upstream production will be affected, and downstream consumption will inevitably be affected.


5. The degree of integration between the Chinese economy and the world economy has been quite high. Although the current epidemic in China is contained, the pace of China's economic recovery is bound to be even slower under the background of the global spread of the epidemic.


6. For China, helping others means helping oneself.



According to media reports, at present, the new crown pneumonia epidemic is having an impact on China's economy. The most serious negative impact is on the demand side, and investment, consumption, and exports have been significantly affected. The epidemic has had varying degrees of negative impact on the three major industries, of which the tertiary industry has the greatest impact.


According to data from the National Bureau of Statistics, in 2019, the proportion of employees in the tertiary industry in my country reached 55%. Due to the continuous increase in the proportion of employment in the tertiary industry in my country in recent years, the epidemic has a wider scope, deeper impact and negative impact on employment in my country. Bigger.


Under the macro data, it is actually the work, life and study of each of our ordinary people. Under the epidemic, are there any eggs? Everyone is involuntary and will inevitably be affected to varying degrees.


PS: Today's content is more hardcore and not very interesting. But I believe that the data I have worked so hard to compile will be helpful to everyone's understanding of society and future planning.


Events


March 24. The International Olympic Committee and the Prime Minister of Japan announced that the Tokyo 2020 Olympics will be postponed to 2021, and the name will remain "Tokyo 2020". This will be the first time that the modern Olympics in peacetime has not been held as planned. According to previous speculations by many Japanese media, the direct economic loss caused by the postponement of the Tokyo Olympics is about US$6 billion. These losses are only the loss of the Olympic Games itself and the financial consumption caused by the one-year delay. If the Olympics are cancelled, the loss will reach 41 billion US dollars


On March 23, the Canton Fair in Guangzhou, China announced the postponement. At present, the Canton Fair, which has the longest history, the largest scale, the largest number of buyers and the widest distribution of countries in China, will be affected by the epidemic as a topic of concern for many exhibitors and buyers. It is reported that in 2019 the Canton Fair’s accumulated export transactions amounted to RMB 19,524 million.


Bloomberg reported that due to the epidemic, the Mobile World Congress originally scheduled for February 24 to 27 this year was cancelled. The conference is regarded as the world's largest mobile technology exhibition, which was originally expected to attract 100,000 people from about 200 countries.


unemployment rate


The International Labor Organization (ILO) said on Wednesday that if governments do not act quickly, health risks could trigger a global economic crisis and destroy up to 25 million jobs worldwide.


Under the new crown epidemic, California's unemployment rate hit a record high, and the number of unemployed persons may exceed 280,000. California Governor Newsom said on March 19 that although official data have not yet been released, the number of unemployment insurance applications in the state has doubled in just two days. According to Newsom, California government departments receive an average of 2,000 unemployment insurance applications every day. Two or three days ago, they had received 40,000 applications. On Tuesday, there were as many as 80,000 unemployment insurance applications.

The unemployment rate in Hong Kong rose from November last year to January this year. The employment situation in consumer and tourism-related industries, including retail, accommodation and catering services, was even more severe. The total unemployment rate in related industries rose to 5.2%, a three-year high. The number of employed persons continued to plummet year-on-year. The unemployment rate in the construction industry further rose to 5.7%, a record high in the past six years. The unemployment rate in the import and export trade and wholesale industries also rose significantly.


On March 16, the National Bureau of Statistics released China’s economic data from January to February. In February, affected by the epidemic, business shutdowns increased, employment decreased, and employment numbers declined. The unemployment rate in the national urban survey was 6.2%. Set a new high since 2000. Previously, this figure was mostly below 4%.

Employment of college graduates


It is difficult for college students to find a job every year, and it is getting harder every year, and this year is also called the "hardest in history."


Around the Spring Festival, it is the annual "Spring Recruitment" season. Many recent graduates reported that the number of companies and positions involved in recruitment this year has decreased compared with previous years. According to the data of "Talent Trend Observation in the 10 Days After the Spring Festival in 2020" released by a recruitment platform, in the ten days after the holiday (2.3-2.12), the scale of new jobs for fresh graduates dropped by 49%. As the main creative body of fresh graduates, 100 people The demand for fresh graduates of the following small and micro enterprises has dropped by 60% year-on-year. From the data point of view, with the exception of real estate, the demand for new graduates in other industries has dropped significantly.


Job shrinking is also mainly related to the company's business viability. Recently, Tsinghua University and Peking University jointly conducted a questionnaire survey on 995 small and medium-sized enterprises affected by the new crown epidemic. The survey results show that 34% of the companies can only be maintained for one month, 33.1% of the companies can be maintained for 2 months, and 17.91% of the companies can be maintained for 3 months. This means that 85.01% of companies’ cash on their accounts can only last up to three months.


In 2020, there are about 8.74 million college graduates in my country, which is not only the largest, but also an increase of 400,000 compared with the previous year, the largest increase since 2012. Considering that this year's college graduates increased by 400,000 year-on-year compared with 2019, it is expected that college graduates will face a severe employment situation in the first half of this year.


While the number of domestic college graduates has increased significantly, the number of graduates returning from studying abroad is also increasing year by year. From 2015 to 2018, there were 408,000, 432,000, 481,000, and 519,000 students who returned to study abroad. It is estimated that the growth trend will continue in 2019 and 2020, and the scale in 2020 is estimated to be around 600,000 people


Food consumption

According to statistics from the National Bureau of Statistics, the national catering revenue in 2019 was 4672.1 billion yuan, of which 15.5% came from the traditional peak consumption season during the Spring Festival. During the Spring Festival this year, the catering industry suffered serious losses. This survey shows that compared with the Spring Festival last year, during the epidemic, 78% of catering companies lost more than 100% of their operating income; 9% of companies lost more than 90% of their revenue; 7% of companies lost 70% to 90% of their revenue. The loss of revenue is only 5% below 70%. According to data from the Evergrande Research Institute, within 7 days of the Spring Festival, the epidemic has caused a loss of about 500 billion yuan in retail sales in the catering industry.


According to the “Report on the Impact of the 2020 New Coronary Pneumonia Epidemic on China’s Catering Industry” issued by the China Cuisine Association on February 12. During the Spring Festival in 2020, the cancellation of the New Year’s Eve dinner will reach about 94%. Research shows that during the epidemic, 93% of catering companies chose to close their stores. Among them, 73% of the companies closed all their stores; 8% of the companies closed more than 80% of their stores; 7% of the companies closed less than half of their stores; only 7% of the catering companies were due to group meals or Single store, all stores continue to maintain maintenance operations.


The Meituan Research Institute analyzed 32,000 questionnaires and concluded that 90% of merchants will lose a lot during the Spring Festival in 2020, and all categories will be affected; the epidemic will have a large impact on chain stores; my country’s catering industry faces many difficulties and problems. Ninety% of catering merchants are short of funds, and 15.3% of catering merchants have clear plans to close their stores.

The reason for all this is only due to the impact of the epidemic.


hotel accomodation


The new crown pneumonia epidemic has struck, and the national accommodation industry has been greatly affected, becoming one of the most severely damaged industries. According to a report jointly issued by the China Hotel Association and Unihuasheng, in the first two months of 2020, hotel and homestay accommodation companies will lose more than 67 billion yuan in turnover, and rental apartments will lose about 700 million yuan.


According to Qunar.com data, affected by the epidemic, the popularity of tourism products dropped sharply during Valentine's Day this year. Taking domestic hotels as an example, data shows that the number of domestic hotel bookings during Valentine's Day this year dropped by 95% compared with the same period last year.


Tourism


Before the Spring Festival, major institutions predict that the number of tourists during the Spring Festival in 2020 will exceed 450 million, an increase of 8% over the Spring Festival in 2019, and the market size is about 555 billion yuan. Due to the sudden outbreak of the epidemic, the predicted value instantly vanished.


The domestic tourism market mainly relies on three time periods to make money: Spring Festival holiday, summer holiday and National Day holiday. Due to the epidemic, tourism revenue during the Spring Festival holiday has been greatly reduced, which is equivalent to a direct loss of 1/3 of the national tourism industry's revenue.




According to Wu Bihu, director of the Tourism Research and Planning Center of Peking University, “If we calculate the optimistic estimate that the three-month dead-end period is reduced by 60% and the three-month recovery period is reduced by 30%, the national tourism industry is expected to lose close to 3 trillion yuan this year."




Export trade




On March 19, the Ministry of Commerce held an online press conference. Jiang Fan, the first-level inspector of the Foreign Trade Department of the Ministry of Commerce, said frankly at the press conference that at present, the new crown pneumonia epidemic is spreading globally. There have been confirmed cases in more than 160 countries and regions. Production and consumption in some countries have been affected. Trade With reduced activities and increasing downward pressure on the global economy, foreign trade companies may encounter problems such as sluggish external demand and reduced orders in the coming period.




International maritime transport has undertaken more than 90% of the trade in goods, and the transport of goods has been affected by the epidemic. In terms of loading and unloading volume, 7 of the world's largest container ports are in China. It is estimated that China's seaborne trade imports in 2019 have reached 2.64 billion tons, accounting for 22% of the total global seaborne volume, more than three times the scale of 2003.




real estate




In the real estate sector, according to the China Real Estate Decision Consulting Data Platform (CRIC), the transaction volume of commercial housing in 88 key cities during the Spring Festival decreased by 63% compared to the 2018 Spring Festival holiday. There were zero transactions in some third- and fourth-tier cities, and housing demand was curbed in the short term.




In the land auction, affected by the epidemic, many provinces and cities issued notices to suspend or postpone the transfer of land. For example, on February 3, 2020, several cities including Suzhou, Tianjin, Nantong issued notices to postpone the transfer of several land From days to 10 days. Some cities began to start online transactions. For example, Changsha launched an online land trading platform on February 8, and 32 plots of land resumed to be listed. However, the overall transaction was sluggish.




Transportation




On March 4, flights from Shanghai to Chongqing started at 59 yuan, only 0.3% off the full price, while flights from Shanghai to Changchun that day were only 70 yuan without infrastructure fuel surcharges. On February 26, the fare from Shanghai to Chongqing was only 49 yuan, and the fare from Shanghai to Harbin was only 99 yuan, with discounts of 0.3% and 0.5% respectively. On February 6, the Director of the Transportation Department of the Civil Aviation Administration stated at a press conference that airlines cut flights during the Spring Festival, with a passenger load factor of less than 45%, and the total number of flights was only nearly half of last year's.




According to data from the Ministry of Transport, from January 10th to 31st, a total of 1.258 billion passengers were sent by railways, roads, waterways, and civil aviation across the country, a decrease of 20.6% from the same period last year. Among them, the number of passengers sent by railway decreased by 10.7%; the number of passengers sent by road decreased by 22.1%; the number of passengers sent by waterway decreased by 34.0%; and the number of passengers sent by civil aviation decreased by 14.4%.




Manufacturing and export




An industry survey report in Shaoxing, Zhejiang showed that 78.4% of textile companies indicated that orders were decreasing, and 64.8% of companies reported that existing orders were cancelled by customers. Many foreign trade-oriented textile and apparel companies, shoe companies and even glasses companies have encountered the situation of cancellation or postponement of orders.




On March 21, according to media reports, a well-known watch factory in Dongguan issued an announcement, voluntarily persuading employees to seek another career, and the whole factory will be on holiday for at least 3 months. The most important customer of this finished watch factory called Dongguan Precision Watch Co., Ltd. is the American brand Fossil. In the announcement, it stated that Baoli "Fossil" has now stopped all orders, and requested to cancel or suspend the original production orders, which caused the factory to fail to operate normally. The company's business has already experienced a major crisis and is facing the risk of shutting down at any time.




The decline in domestic demand in other countries means that my country's external demand has decreased. Europe is China's largest trading partner, followed by the United States, and Japan and South Korea. The total annual trade volume of the EU, the United States, Japan and South Korea combined is about half of that of China, and the epidemics in these places are more serious, especially in the EU.




China's economic growth expectations




Bloomberg reported on the 18th that as the economic data for the first quarter may be less than expected, the three Bloomberg economists lowered their forecasts for China's economic growth in 2020, from 5.2% to 1.4%. Bloomberg economists also said that this is the third update of its forecast for China's GDP, and it may not be the last. Investment bank Nomura expects China's GDP growth rate this year to be 4.8%. Standard Chartered Bank lowered its 2020 economic growth forecast for China from 5.5% to 4%.




Peking University economics professor Cao Heping said in an interview with reporters on the 18th that he did not agree with overly pessimistic predictions. Due to the resilience of China's economy and the increased policy efforts, he believes that China's annual economic growth rate may fall within the range of 4%-5.5%.




On March 16, the Bureau of Statistics announced data that investment and consumption data fell by more than 20%, and the industrial and service industries fell by more than 13%, which is enough to explain the impact of the epidemic on China's economy.




Global economy




Kristalina Georgieva, president of the International Monetary Fund (IMF), believes that although the global economy will face a severe recession this year, it will still usher in a recovery in 2021. Georgieva said on March 23, “In 2020, the global economy will show negative growth. This economic recession is at least as severe as during the global financial crisis, or even worse, but we expect the economy to recover in 2021.”




The French Minister of Economy even bluntly stated that the impact of the new crown pneumonia epidemic on the economy is only comparable to the Great Depression of 1929.




Many Asian countries have lowered their economic growth expectations for 2020-




The Bank of Korea lowered its economic growth forecast for this year by 0.2 percentage points to 2.1%;


The Ministry of Trade and Industry of Singapore lowered Singapore’s economic growth forecast this year from 0.5%-2.5% to minus 0.5%-1.5%;


Thailand's Kaitai Research Center lowered its forecast for Thailand's economic growth this year from 2.7% to 0.5%.


S&P has previously lowered its first quarter economic growth forecast for the United States from 2.2% before the epidemic to less than 1%, and it expects a gradual recovery in the next few quarters


On March 2, the Organisation for Economic Cooperation and Development (OECD) lowered the global economic growth forecast for the full year 2020 from 2.9% to 2.4%, the lowest growth since 2009. At the same time, the OECD emphasizes that if public health events last longer and spread in Asia, Europe and the United States, the economic impact will be very serious. In this case, global growth is only 1.5%, and economies including Japan and the Eurozone may experience a recession. Goldman Sachs also predicts that the global economy may shrink by about a quarter.




European economy






On March 25, due to the impact of the new crown pneumonia epidemic, all Daimler spare parts warehouses in Germany were closed, and warehouses in Malaysia and Singapore also stopped shipping. Industry insiders predict that in the next three months, all futures orders will not be delivered on time.




On March 4, media reports that the epidemic forced Apple to temporarily close Italian retail stores. On March 12, according to the latest reports from foreign media, Apple has been forced to close all stores in Italy due to the continuous spread of new coronavirus pneumonia around the world.




According to news on March 21, due to the impact of the epidemic, Zara's parent company and Spanish fast fashion brand Inditex closed 3785 stores in 39 countries and regions around the world. On March 23, the Inditex Group, the parent company of Zara, said on Monday that in view of the emergency in Spain that will continue until after April 15, it may consider temporarily dismissing all 25,000 employees of its brands in the region, but logistics, central services and manufacturing Employees of the department will not be affected.




Affected by the new crown virus pneumonia epidemic, even if the auto industry enters the stage of resumption of production, the shortage of parts and components still cannot be solved, and major auto companies have to reduce operating rates or reduce production. A BMW Brilliance dealer document shows that customer orders for some quotas in March and April will be deleted or cancelled, and no production plan will be arranged. In addition, many BMW dealers announced that they will reduce terminal discounts for affected models from now on.




U.S. economy




According to the prediction of two famous economics professors at the University of California, Berkeley, Says and Zuckerman, if more areas of the United States have to implement lockdown measures similar to the San Francisco Bay Area due to the epidemic, the US GDP may shrink by more than 7% this year. JPMorgan Chase previously predicted that US GDP would fall by 14% during the epidemic, and Goldman Sachs even predicted it would fall by 24%.






Global tourism




With the continuous development of the epidemic, the Japanese tourism industry should be most affected by hotels, shopping malls (including department stores, duty-free shops, drugstores, etc.), catering, followed by travel agencies, bus companies, scenic spots, and so on. According to the "Nihon Keizai Shimbun" report, in the Kansai region, affected by the decline in Chinese tourists, 80% of the companies indicated that their turnover during the 2020 Spring Festival has declined compared with the same period last year. 25% of respondents said the decline was "more than 20%."




According to data from the United Nations Economic and Social Commission for Asia and the Pacific, during the Chinese Lunar New Year this year, international tourists in the Asia-Pacific region have decreased by 73% year-on-year. Data from the Thai Ministry of Finance show that in February this year, the number of international tourists in Thailand fell by 44%, putting the Thai economy under pressure.




Electronic chip industry




Affected by the new crown pneumonia epidemic, South Korea’s "Silicon Valley" is suffering an unprecedented impact. Companies such as Samsung Electronics and SK Hynix, which occupy important positions in the semiconductor and electronics industries in Korea and the world, are also facing numerous crises. From the perspective of the industrial chain layout of the chip industry, South Korea is mainly the manufacturing base, Japan is the material and equipment provider that supports chip manufacturing, and China is the main consumption base. According to a report recently released by the Export-Import Bank of Korea, affected by the epidemic, the demand for smartphones in the Chinese market is expected to drop by about 10% year-on-year.




Even if the epidemic does not break out in the United States, it will have an indirect impact on the U.S. economy, because China, Japan, and South Korea are all part of the U.S. manufacturing industry chain. If something goes wrong in the three countries, China, Japan, and South Korea will not be able to produce For the spare parts needed by American companies, the impact on the American manufacturing industry will certainly be more serious.




Air shipping




On March 5, British Airways Flybe declared bankruptcy, becoming the first airline company to be dragged down by the epidemic. This 41-year-old airline operates nearly two-fifths of the UK’s domestic flights. It was once the largest independent regional airline in Europe. It carries 8 million passengers a year and operates more than 200 routes. Its bankruptcy will cost 2000 Many jobs are on the verge of danger, and it has also increased the uncertainty of dozens of regional routes within the United Kingdom. It is a microcosm of the huge blow the epidemic has caused to the global air transport industry.




On March 24, the media reported that General Electric said on Monday local time that its aircraft engine division in the United States would lay off 10% of its employees, and 2,500 employees would be affected by this. In addition, half of the maintenance staff would enter the three-year period. Unpaid leave of the month. With benchmarking significance, General Electric has also become the first American manufacturing leader to announce a major layoff plan in this round of the epidemic.






An assessment by the International Air Transport Association (IATA), headquartered in Montreal, Canada, believes that the global spread of the new crown epidemic has caused huge losses to the international shipping industry and is expected to lose US$113 billion in annual revenue.