COV-19: China Leads Global Pandemic Containment – International Commerce Delayed

By: Kenneth D. Knight, Associate Editor 

On December 31, 2019 the World Health Organization (WHO) was notified by the China Country Office that there were multiple cases of pneumonia with an unknown source, originating from Wuhan City, Hubei Province of China.  In their first situation report, dated January 20, 2020, 282 total cases had been reported, resulting in six deaths, spanning across seven countries and territories.  Although these reports cover a short period of time to date, the results recorded have changed drastically over time.  On March 13, 2020, President Trump declared COV-19, or informally referred to as Coronavirus, a global pandemic and announced a national state of emergency in the United States.  Recently, in the March 31, 2020 submission, the WHO reported an outstanding 750,890 total cases globally have been reported to date, increasing the death count to 36,405 deaths.  This pandemic spans across 202 countries at this time, with the United States leading the current results with 140,640 confirmed cases.  The WHO Director-General, Dr. Tedros Adhanom Ghebreyesus, stated in early March that the danger of this virus stemmed from findings of “difficulty in identifying cases due to non-specific symptoms and the potential of undetected transmission,” as well as the “potential for major impact on healthcare systems in some affected and potentially affected countries.”  With no clear foresight as to how this outbreak would affect the world, countless economies have been paralyzed by the lack of clarity.

A White Paper created by the American Chamber of Commerce in South China detailed the impact of COV-19 on the supply chains that operate through the Chinese market.  From March 9 to 14, 2020, 237 random companies were tested to determine the scope of this disease on multinational commerce.  From this study, the United States was identified as representing more than half of the lion share of the market, while the European Union and Asia-Pacific Economic Cooperation (APEC) make up the remainder.  One third of the companies surveyed have already reported a shortage of necessary inventory, while 15% have reported their current supplies are depleted.  All companies surveyed have realized a detrimental impact to their supply chains, and 80% believe there will be a lasting effect for one to three months.  These effects on production and access to available supplies will inevitably correlate with the impact on employment globally.

Ironically, this pandemic comes on the heels of recent tensions between the United States and China seeking to “decouple” their trade markets.  The United States cannot continue to over-rely on the Chinese market, because this overreliance has historically led to economic consequences.  These economies and trade markets are intertwined; however, this current situation has highlighted the necessity for the United States to seek diverse investment opportunities.  If the findings above are accurate, the current impact of COV-19 to the Chinese supply chain will cause drastic effects in international commerce –– and in ­the United States directly.

In order to help contain this outbreak and protect international commerce, the current Administration must do more than direct the States to unilaterally mitigate the spread of COV-19.  To protect these multinational supply chains and the overall health and safety of the people, a more vigorous approach must be taken.  China, where the disease originated, through various techniques, has reported a steady decline, and a “zeroing out” of new cases recently.  These results are due to the implementation of strict laws to possibly punish individuals who fail to disclose their travel to areas where outbreaks are prominent and by shifting jobs and the current economic infrastructure to support the nation’s overall healthcare.

COVID-19 is a global pandemic with the expansion rate to cause significant economic stress.  Due to a lack of healthy employees, a shortage of suitable equipment, and a lack of testing, these strains have generated more than a financial burden.  Without proper order, the effect on multinational commerce will continue to expand across various nations.  The health and safety of the people must be the primary concern if any international commerce can be maintained.



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