Financial expert: Virus brings China's economy to the brink of shutdown

The first month of the new year is hardly over, and it abounds in the financial markets is the only way of so-called black swans - the unlikely, but not impossi

Financial expert: Virus brings China's economy to the brink of shutdown

The first month of the new year is hardly over, and it abounds in the financial markets is the only way of so-called black swans - the unlikely, but not impossible risk event that can bring the financial markets out of balance.

a few weeks Ago, it was still the conflict between the US and Iran, now it is the Coronavirus. And while the Iran-United States-has adopted a conflict again from the radar screens of the markets will be dealing with the Coronavirus and its impact the markets for a while. Reason to panic? The Person

Carsten Brzeski chief economist ING-DiBa in Frankfurt

Many Unknowns: How do a Virus effect?

The current unrest in the financial markets coincides with the unrest in the population: How bad this Virus really is and how quickly it spreads? Even medical experts do not know the answer (yet).

As a medical layman, I would assume, just assume, that the Virus is stronger and faster spread in the Rest of the world as it was when the SARS Virus in 2003. Meanwhile, twice as many people fly worldwide through the world as in 2003. Due to the high and increased the economic prosperity of Chinese tourists traveling around the world and an important business factor.

The cases in Bavaria, show how strong, Chinese companies are now integrated in the international production chain: another reason for increased contagion effects. Finally, you also forget that many Chinese Expats for the new year celebrations came to China and now back in the USA, Europe or other regions. The reports of rising cases of infection in the United States and Europe will increase in the next few weeks is very likely. With the SCC-exchange of letters next to values, and in the short term and the long term Top return on investment! (Partner quote) Here is an exclusive 30-day free trial!

China's economy breaks a

What does this mean for the world economy? Not to say difficult, as long as you know how bad the Coronavirus is now really. Let's leave the doom scenario of a global pandemic times. Alone, in its present Form, and with the uncertainty about the actual Severity of the Coronavirus will bring the Chinese economy in the first quarter to the brink of standstill.

Whole cities are under quarantine, the retail breaks, despite a probable rise of Online Commerce, and businesses will be closed. It doesn't stop there, however. Airlines from the United States and Europe set the flights, the hotel chain will have losses and companies that are either part of the Chinese production chain, or direct and indirect trade relations with China, are likely to come under pressure.

consumers are confused

These links are significantly larger than in 2003. And then the consumer is there. Especially in Europe the consumer has saved in the last year, the economy in front of a slide into recession. Fear and uncertainty caused by the Coronavirus could bring this Motor now for the stutter or even to an abrupt Stop.

with regard to the economic consequences, it will be with the Coronavirus probably only once worse before they get better. But there is at least one positive aspect: How bad they may be, purely by macro-economic perspective, considered, applies to natural disasters, in fact, always, that the economy will challenge growth by catch-up effects in the course of the year.

With all the current drama is now: doomsday predictions occur really never. Black swans already.

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Date Of Update: 10 February 2020, 15:00
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