China is the epicenter of the world’s supply chain. Also, the commercial environment in China is young, and domestic consumption has been on the rise for many years. Many international markets are highly dependent on China; therefore, disturbances in China’s economy and its supply chain will be felt through the world.
Many economists are comparing the coronavirus epidemic with the SARS epidemic in 2002-2003. The economic impact of SARS was little compared to the coronavirus situation now. In contrary to 2002-2003, China has now become the second largest economy in the world after only the US.
Economic experts are also warning investors and CEOs of potential massive losses in the coming months as the coronavirus is expected to spread to more countries. The S&P is then expected to hit lower levels, and earnings growth in both the USA and China are expected to be little-to-none.
Many companies around the world are heavily dependent on China for the manufacturing and assembling parts. Activities of the Chinese factories is anticipated to be depressed and to remain like this in the following months.
Some of the companies being hard hit with COVID-19 are:
Apple
Apple was the first major tech organization to openly declare that its production and business were adversely affected due to the virus epidemic. Apple’s market value went down $26 billion. It has closed all of its stores in China to contain the virus and have revised their revenue projection due to a limited supply of iPhone and other Apple products.
Microsoft
Microsoft recently said that it is going to miss its initial revenue projection because the PC and Windows business was hit by the coronavirus. The production line of Microsoft is largely based in China. The coronavirus pandemic has erased $62 billion in Microsoft’s market value.
Mastercard
Heavy restrictions and procedures are placed to contain the effects of COVID-19. Traveling agencies and e-commerce activities are expected to be affected substantially. Hence, Mastercard has announced to lower its revenue growth from 3% to 2%. Currently, it has lost about $22 billion in market value.
Coca-Cola
The leading soft drink company, Coca-Cola, announced that its supply chain had got adversely disturbed, and the export of sweeteners from China is also getting difficult. Coca-Cola is expected to reveal more information in its quarterly report in April. Currently, Coca-Cola’s market value fell around $6 billion.
United Airlines
United Airlines adjusted its annual revenue projection very quickly after the rise of coronavirus. They expected travel restrictions at the early stages of the outbreak. Its losses are estimated at $1.2 billion. According to statistics published by United Airlines, it is facing a complete decline in demand from China, and around a 75% decline in demand to other affected countries
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