Going viral

It soon became apparent that the drastic measures taken by the Chinese authorities to curb the progress of the epidemic would not be enough to reduce its economic impact: after all, China supplies the global economy not only with raw materials but also has around three million production plants. The conclusion from a supply chain analysis of the various sectors affected was that after a dozen or so days the coronavirus could actually trigger a financial crisis, since it would paralyse an economically important region of China and thus the entire Chinese economy that is still having to absorb the effects of the slowdown and the trade war with the US. The Chinese central bank has responded by lowering interest rates and supporting the interbank system with CNY 300 bln in loans. The IMF has since reduced its forecasts for global economic growth to 3.3 pct and further downward revisions are possible as the virus spreads. Transport, logistics, mining and tourism are the sectors that have be