Massive quarantine efforts underway in China . . .
The coronavirus outbreak in China has prompted Chinese authorities to take drastic measures to contain its spread. China has imposed the largest-ever human quarantine, putting 16 cities on lockdown and affecting 60 million people. Many Lunar New Year celebrations have also been cancelled and citizens have been advised to stay home, leaving many public places completely deserted. These measures may help contain the outbreak, but they will also impact various industries with close economic ties to China.
Seafood industry feeling the pain . . .
Canadian lobster, a luxury commodity in high demand in China, especially for New Year celebrations, is being acutely affected by the virus’s spread. Just as China has fast become the biggest market for Canadian live lobsters, with sales reportedly increasing by 127 per cent in two years, exporters are now seeing a significant drop in sales. That’s now causing panic throughout the eastern Canadian lobster industry and leaving exporters with larger than expected inventories, which is driving down prices. The pain currently felt by seafood exporters in Atlantic Canada could spread to other industries such as automobiles, spirits, and luxury goods.
Long-term impacts expected . . .
Yesterday, the World Health Organization declared the coronavirus outbreak a “public health and emergency of international concern,” raising uncertainty for businesses and investors who are waiting to see how far the virus spreads. The long-term macroeconomic effects in China and around the world are still unknown, but economists expect it to slash China’s economic growth by as much as 1.5 per cent in 2020. The coming days and weeks will provide more clues as to how markets react, and what it might mean for Canada.