24 FEB,2020 | MEDC
The coronavirus which has already claimed over 2000 lives in mainland China will undoubtedly affect many Asian economies and pose a serious threat to global growth. The only saving grace for the Chinese economy is that the months of January and February have traditionally witnessed the slowest economic activity due to the lunar holidays. Despite most of the Western media highlighting the outbreak as being China’s Chernobyl moment, is unlikely that much will change. With legitimate questions arising as to who knew the extent and seriousness of the outbreak and when, China’s credibility in the global economic system is likely to take a hit. This unreliability will be traced to its opaque political system, and, with the continuing US China trade war, many MNCs are likely to diversify their sourcing away from China. South-East Asia (especially Vietnam) will probably be the biggest beneficiary of such a move, but India also needs to position itself appropriately to take advantage of it.
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