With the world’s number-two economy increasingly reliant on its consumers to drive growth, the virus has struck at the worst possible time with hundreds of millions of people fanned out across the country for the Lunar New Year holiday.
But Julian Evans-Pritchard of Capital Economics said there wasn’t “any doubt” the coronavirus outbreak which has killed more than 100 people would deliver a fresh blow, warning that transport and broader consumption would be hit, including dining and retail. Popular restaurant chain Haidilao will close all its restaurants in China until the end of the month.
More than 2,000 high-speed trains a popular mode of transportation in the vast country have been suspended for days or weeks.China’s box-office earnings for Lunar New Year’s Eve were just one-tenth of last year as people shunned cinema crowds, and seven key blockbusters set to be released during the holiday were cancelled.
The shutdown has been most serious in central Hubei province — the epicentre of the virus — where train stations have been closed, events cancelled and theatres, libraries and karaoke bars shut in some locations.Hubei’s capital, Wuhan, a major manufacturing hub of 11 million people that produces steel and cars, has been placed under indefinite quarantine since Thursday.
The output value of the automobile and parts industry in Wuhan was around 400 billion yuan , according to a report in the Changliang Daily.“Complicated supply chains and just-in-time production could mean that production outages in Wuhan factories have broader spillover effects,” S&P warned in a research note.