The Impact of COVID-19 on the Chinese Economy

There is no denying that the pandemic was a significant disruption to China's supply chain. Still, the impact is not even remotely as adverse as anyone would have expected two months

Fremont, CA: The global economy has taken a tumble due to the ongoing Coronavirus pandemic. Businesses across all sectors have been forced to reinvent themselves, reacting to the new challenges posed and navigating around them. As some countries emerge out of the pandemic, many are still struggling to contain the disease. Businesses in major global cities such as Rome and New York have been gravely affected by this unfortunate turn of events. Organizations have become highly dependent upon mobile responses. But the unpredictable nature of the virus and under-preparedness of executives and government leaders has brought little success. There is a need for a reliable, workable action plan to tackle the virus and its repercussions.

Surprisingly, China, the epicenter of the virus, was the fastest to recover from the pandemic, even as the world's leading economies continue to dwindle. China's relentless investment in plug and play strategies to reduce the impact of the virus on the country's economy has paid off significantly. There is no denying that the pandemic was a significant disruption to China's supply chain. Still, the impact is not even remotely as adverse as anyone would have expected two months. Although the virus originated in Wuhan, there are more people in quarantine in European and American regions, than in China.

The Chinese government's achievement is indeed commendable when it comes to dealing with the pandemic. The government has checked all the right boxes when it comes to containing the COVID-19 and has also reassured their trade partners that business will resume to normalcy soon. Despite these reassurances, the partial and complete shutdown of factories has left the country's ecommerce sector nearly paralyzed. Some of the prominent multinational technology companies that had set base in China or that were relying on Chinese raw materials and manufacturers are already considering their options.

The pandemic has also had a significant impact on digital advertising and online retail in the country. There has been an unprecedented shortage of raw materials for the ecommerce sector, along with bottlenecks in logistics. As profits continue to dwindle, the virus could have dire impacts in the long run. Employee layoffs cannot be put off if the situation continues. Also, even if the Chinese economy rises to maximum output, its business partners in different nations need to match those levels of production, which is a far off scenario today