»RELATED: Virus pushes beyond Asia, taking aim at Europe, Mideast
The number of people infected with the virus has ballooned to more than 79,000 people, crippling China’s economy. Rapidly spreading outbreaks have now been reported in Italy, Iran and South Korea.
The virus is expected to be a devastating hit to the Chinese economy’s first quarter. According to Emory business professor Ruomeng Cui, the virus is one more thing on a long list of problems facing China’s economy.
“Manufacturing is obviously disrupted,” Cui said. “This will affect global supply chains. U.S. retailers will suffer from the delayed production, especially the retailers who have a responsive supply chain.”
“The past few weeks has demonstrated just how quickly a new virus can spread around the world and cause widespread fear and disruption,” said the head of the World Health Organization, Tedros Adhanom Ghebreyesus.
“Within China, the traveling, airline, hotel, and tourism industry will take a big hit,” Cui said. “Cities are quarantined, people have to stay isolated. Parks, museums, concerns, and meetings are all closed. This might affect other Asian countries close to China like Japan and Korea.”
Cui also expects if the virus lasts more than three months, “90% of China’s restaurants may fail.”
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“If we look at SARS history in 2003, it took the manufacturing industry one quarter to return back to normal quickly,: she said. “It took the service industry two quarters to return back to normal. Customers need time to recover their behavior from the virus tension.”
South Korea is now on its highest alert for infectious diseases after cases there spiked. Italy reported a fifth person had died amid a sharp rise in cases and a dozen towns in the northern part of that country are under quarantine.
The nation now has the biggest outbreak in Europe, prompting officials to cancel Venice’s famed Carnival, along with soccer matches and other public gatherings. In Iran, the virus reportedly has killed 50 in the city of Qom. Iraq confirmed the first case there Monday.
Investors have been on edge since the start of the crisis because of the role that China’s factories play in global business and because it is a huge consumer market itself. But fresh reports that the virus is not contained are “signaling alarm bells,” a market analyst at Citigroup wrote Monday.