Question

Write a brief, one-page analysis of the impact of Coronavirus on international business, and write a question at the end that you would ask your peers in relation to what you wrote (the idea is that you are recreating the current events assignment, but just writing it for me instead of your group). Try to incorporate some of the topics from this course. You could talk about this in terms of trade, regional integration, political distances, etc. Be creative and try to write something interesting. Avoid using personal opinion. If you use a lot of data, please cite the source from which you got your data.

Answer 1

If we look at the current status of the Chinese economy, it has a greater connection with the world’s economy than in past and it has a 17% share of global GDP and trade equal to 34% of the domestic GDP. After the outbreak of COVID 19, it is expected that the global GDP will be reduced by 2%. Apart from the decline in GDP, this will also have an impact on the important macroeconomic indicators such as the prices of crude oil, interest rates, unemployment rates. Due to almost no transportation among the countries, the demand for crude oil is expected to fall and there can be a huge reduction in the interest rates

COVID19 will have a larger consequence on Asian countries such as Vietnam, Cambodia, Laos, Philippines and so on as these countries heavily rely on China for trade and tourism. China has almost 60-90% of total exports and 50% tourism revenues for these nations and it can lead to the economic slowdown in these countries.

Germany is the other country that could be hit by this spread of the disease. The country is the fourth-largest economy in the world. If the situation gets worst, it will have a near-zero GDP growth in 2020 and the reduction of vehicle sales will have serious consequences for the country’s automobile sector.

India is the 5th largest economy in the world and it imports huge quantities of electronic items and the disease can result s in the food inflation and dip in the GDP for 2020

The world’s largest economy the USA is expected to see a drastic decline in the imports of retail items in the first quarter of 2020. There can also be a default of China on the different targets such as $200 billion import of US Agri products which was decided by China with Trump administration.

The economy all over the world is going to be plunged and many experts think that the world economy will take another 2-3 years from this downturn resulting in loss of jobs, serious financial and food-related problems and shortfalls. The countries which rely heavily on tourism will have to face the real heat. Definitely world has a very tough time ahead.

Question= What could be the possible way out for the world economy from this disaster?

Reference=

Parmelee, M. (2020, March 20). Deloitte BrandVoice: Flex Work Is A Frontline Solution-And Not Just In A Crisis. Retrieved from forbes/sites/deloitte/2020/03/20/flex-work-is-a-frontline-solution-and-not-just-in-a-crisis/