Coronavirus slowdown starts to bite the world’s industries

Coronavirus slowdown starts to bite the world’s industries, by Robert Gottliebsen.

The markets have shrugged off coronavirus woes, surging to several new highs around the world.

Never before in our history have global sharemarkets taken such an incredible gamble on the ability of our scientists, aided by artificial intelligence, to halt a rapidly spreading disease.

And the markets gamble is being fanned by excess world liquidity, aided by massive injections in China and the boom in the US economy which the market believes is likely to see US President Donald Trump returned for another four years.

But coronavirus is increasingly having a big impact in the real world.

We are watching, for example, a rapid shutdown of the world’s second largest economy in a desperate bid to try and contain the spread of the virus.

And those Chinese efforts are being matched by drastic action in countries, like Australia, which are closely bound to China. The dangers these political actions present to major industries will be horrific should the current crisis last for months.

It is already more contagious than the 1918 Spanish flu pandemic.

Vaccines soon?

But markets this week looked the other way to reports on Sky News of a “significant breakthrough” by scientists at Imperial College London, who claim to have reduced a stage of the development time for a coronavirus vaccine from two to three years to just 14 days. …

Students:

A key Australian export industry, tertiary education, has been jeopardised by an overzealous Australian Border Force, which detained Chinese students, cancelled valid student visas and sent some students back to China. The Chinese government was furious at their citizens’ treatment.

China is Australia’s largest source of international students, which spent $12.1bn on education services in Australia last year. More than 100,000 Chinese students who are enrolled for courses in Australian tertiary education this year are still overseas. Most are likely to be stranded in China by the travel ban. …

Others:

The world’s gambling capital Macau will shut its 41 casinos for half a month. It’s like closing the Las Vegas Strip, six times over. …

Most tech-related manufacturers in China, including robotic companies and car makers are saying there is no clear sign of when their production will return to normal. …

If component and material makers resume production later than February 10, it could become a big problem for the whole supply chain because key components, including printed circuit boards, passive components, casings and paper packaging are still mainly made in China. …

The Queensland gas crisis also illustrates the problem for global shipping. The 14-day quarantine on Australian vessels that leave China after February 1 could cause delays and bottlenecks at the LNG port of Gladstone, which typically receives ships every few days. Similarly, tankers travelling to China will hit problems when they attempt to travel to other international destinations.