Can Asian economies survive the coronavirus?

Businesses dependent on Chinese factories and visitors are already feeling the pinch, with some countries implementing stimulus measures

While some experts predict a recovery once the virus’ spread is curbed, others caution that it is still too soon to assess how large an impact it could have

Reading Time:7 minutes

Tourists walk through Bangkok’s Chinatown. Thailand’s central bank has cut its benchmark interest rate to help the economy weather the virus outbreak in China that has devastated its tourism sector. Photo: AP

Published: 12:00pm, 8 Feb 2020Updated: 12:00pm, 8 Feb 2020

For Eilynn Lew, founder of bathroom fixtures company Eilumina, the start of the year is usually a busy time. There are trade shows in Europe to attend and business deals to sign, then a rush to manufacture and ship out goods from China. This year, however, she is grounded in Singapore, unsure if she will be able to fulfil orders because the Chinese factories she uses are not operating.

Daily life and business operations in China have been drastically curtailed as the authorities try to limit opportunities for human-to-human transmission of the novel coronavirus. Some companies have resumed operations and others say they will do so next week, after the extended Lunar New Year break.

But with reports of infections and deaths continuing, businesspeople like Lew are worried about when things will return to normal. “If they don’t return to work in the factories soon, we’re all screwed,” she said.

Lew’s worst-case scenario is that factory output cannot keep up with demand and she will lose out on revenue and fork out up to S$80,000 (US$58,600) in overheads each month. “We can only wait and see, there’s nothing much we can do.”

Across the region, fears of trade and supply-chain disruptions are rising. Thailand Development Research Institute analyst Nonarit Bisonyabut said if China’s economy slowed, Thailand would not be able to sell as many computer and electronic parts, chemical products, rubber and plastic to one of its biggest trading partners.

In New Zealand, reports have emerged of log exports being halted and workers told to go home, while shipments of live lobsters and crayfish – items that would have been in high demand for Lunar New Year gatherings on the mainland – have been suspended. The novel coronavirus has infected more than 30,000 people and killed more than 600 – outstripping 2003’s severe acute respiratory syndrome (Sars) outbreak – with some 1,300 people having recovered from it.

In a bid to limit the spread of the disease, China has locked down some cities and banned outbound tour groups, and countries from the United States to Singapore and Australia are closing their borders to travellers from the mainland.

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