The Chinese authorities have reportedly asked the factories and businesses to stay shut for as long as three more weeks.
The deadly Coronavirus outbreak in mainland China, which has caused 1,369 deaths globally so far as per Worldometer data, is likely to take a toll on the region’s businesses particularly the micro and small businesses. The impacted region, which consists of 19 provinces in the country, has 89 micro and small businesses, according to a Dun & Bradstreet report titled Business Impact of the Coronavirus announced on Wednesday. Out of this, 70 per cent are micro-enterprises which have less than 10 employees while 19 per cent are small businesses which have a headcount of less than 100 employees.
Measuring the impact on businesses and supply chain due to the dreaded virus attack, the report said, “the interruptions caused by the government-enforced closures over the growing outbreak might have adverse implications for these businesses, absent specific measures that may be taken to offset the economic hardship as a result of this crisis,” even as the final impact to businesses operating in the affected region is uncertain. The Chinese authorities have reportedly asked the factories and businesses to stay shut for as long as three more weeks,” NBC News reported.
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The major sectors having more than 80 per cent of the businesses in the impacted region are services, wholesale trade, manufacturing, retail, and financial services. The area under impact holds nearly 90 per cent of employment and sales volume of all businesses in China. Hence, the impact on China’s economy “which makes up about 20 per cent of global GDP, the cascading effect might cause a drag of approximately one percentage point on global GDP,” the report said, if the outbreak couldn’t be contained before this year’s summer. There were around 34.7 million registered businesses in China by the end of 2018, as per Statista. The World Health Organization had declared Coronavirus attack a global health emergency on January 30, 2020.
The biggest impact is on the services sector with 28.51 per cent of businesses being impacted followed by 21.13 per cent wholesale businesses and 15.16 per cent in the manufacturing sector. The three highest impacted provinces are Guangdong, Zhejiang, and Shandong which have nearly 20 per cent, 14 per cent, and around 6 per cent share in China’s employment and sales.