Forget SARS, the new Coronavirus threatens a meltdown in China’s economy

South China Morning Post ^ | 02/15/2020 | Cary Huang

[Jane Long]

I don’t remember Nike’s being cheaper since production has moved to China.

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Therein lies the rub.

Prices have NOT decreased, however, profits have increased.

Quality? Well, beauty is in the eye of the beholder, I suppose. Especially when it comes to Chinese made meds/supplements....or, melamine in your pet’s food.

[Kozak]

“Firstly, the Chinese economy is four times as big as it was in 2003, so its losses and the impact on the global economy are likely to be correspondingly larger. “

OK, this statement is BS. There is no way Chinas economy has grown 400% since 2003.

[Pelham]

The majority of medicines that we currently use are dependent upon China, either directly or from precursor chemicals.

U.S. dependence on China for medicine is a major problem

[Georgia Girl 2]

China is deep in the covfefe now. More countries are quarantining. Airlines won’t fly there. Its going to be a bad year for the ChiComs.

[redgolum]

Unfortunately, that is every US company

[redgolum]

They aren’t. But you can make them 40 to 50 percent cheaper in China. Labor is the biggest chunk, followed by regulations.

[Malsua]

Haven’t seen anything on supply chain

I don't have any input on internal supply chain in China for their own consumption, but the company I work for gets a lot of material from China. As of today, we are expecting a minimum of 60 days interruption. We overbought last year and have 4 months of production left, after which we have to start furloughing employees.

Production will resume, no doubt. The issue is after how much time? If it goes on long enough a lot of the smaller suppliers will be out of business and all the larger suppliers will be fighting for container space on ships. They might be able to start up, get the containers loaded and then...they sit. All the ships are full. As of right now, this part of it is certain. There will be supply and delivery interruptions and it will affect EVERYTHING. Need a new toaster? Oh, look at that, only a beat up refurb left on the shelf. I don't think we have any worries about domestic food production, but all the electronics, TVs, phones, and everything else that comes out of Asia is at risk. My advice, if there's something you plan on getting that sources over there, buy it now. It may still be available, but with a huge price premium or expect to wait 6-12 months for prices to equalize again.

[PGR88]

This virus was produced in a state-run lab. It’s China’s Chernobyl

[Robert357]

I see something slightly different. I was in China about a year ago. Glad I was there then and not now.

First, you need to understand the Ponzi scheme that is the modern Chinese economic miracle. It revolves around the government owning land and leasing the land to people for 70 years at dirt cheap prices. It involves having developers build housing on the land and the government helping insure loans on the housing are subsidized. It also involves the government working with Taiwan and Hong Kong money to build factories to employ workers that use to be subsistence farmers.

The epidemic is going to shut down a lot of factories and a lot of workers are not going to get paychecks and companies are going to be hard pressed to meet expenses. That is really not good because it will also dampen Chinese demand for Chinese product in addition to not being able to export as much to other countries particularly the USA.

The part not discussed is that China no longer can feed itself. China relies upon food imports. The coronavirus will dramatically cut Chinese agricultural production which is low to begin with. Food prices prior to the Chinese New Year were already sky high.

When you look at the world and think of who is the biggest food producer, it is the USA. If you want a revolution, you allow people to starve. China is in a harsh place as it is economically, and the house of cards will get even harder to maintain, if people start going hungry.

I think that China is going to exchange all of its built up US trade surplus for food with the US in the very near future and that the US farm industry is going to do very well.

[Tolerance Sucks Rocks]

☑

[Tolerance Sucks Rocks]

Another tax cut, this time generous for both individuals and corporations, unlike the Steve Mnuchin - Paul Ryan Brobdingnag of 2018. Then the companies can afford to manufacture more stuff, and the American taxpayers can better afford to buy that stuff.

[Tolerance Sucks Rocks]

Yes, provided that farmers can source machine parts from other-than-China locales for repairs and maintenance.

[cloudmountain]

Another tax cut, this time generous for both individuals and corporations, unlike the Steve Mnuchin - Paul Ryan Brobdingnag of 2018. Then the companies can afford to manufacture more stuff, and the American taxpayers can better afford to buy that stuff.

AMEN to that!

[trebb]

Thank you for that - I was trying to formulate a decent reply and saw yours.

[21twelve]

IIRC, there was a chart or comment about China’s exports. Back with SARS, China exported something like 4% of their stuff? Or Chinese stuff accounted for 4% of global product??

And today those numbers are 16%??? (I think it was the former - 4% of their GNP was due to exports, now it is 16%)

[21twelve]

Okay - I guess it would have helped to read the article - it was in there (it was total global trade, not just their exports!)

“China’s gross domestic product accounted for around 16 per cent of the global total last year while it was just four per cent in 2003.”

[Svartalfiar]

I have read the cause of many of these illnesses is China’s live animal markets supplying a perfect breeding ground for them.

Not just that, but combine it with what this article says: the lack of cleanliness. Another poster here, I forget where, talked about how China brings food to consumers. The animals live, die, are slaughtered, butchered, packed, sold, and sometimes consumed, all in the same place. None of this is done sanitarily. And as you can likely see from some of the hospital pictures, anything covered in blood isn;t always cleaned off. Especially in a butcher's shop, where it'll just get bloody again. Major breeding ground for bacteria and viri. And fresh blood often washes out into the animal pens/fields, where they are easily infected as well.