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  • Vinay Nair

Coronavirus sends Supply Shockwave around the Financial World

Updated: Mar 9, 2020

As stock markets crash around the world, and global giants like Microsoft see billions of dollars wiped off from their market values, investors are having painful flashbacks to the fateful days of 2008. The global financial crisis of 2007 and '08 have gone down in history as one of the most disastrous financial slumps since 1929. But this time around, we seem to have fewer answers to the frenzied questions of investors, as rising panic takes hold around the rapidly spreading risk of Coronavirus.

The Chinese manufacturing and service sectors are two of the chief ramparts of our global economy. They are instrumental to pumping lifeblood into the hearts of industrial operations worldwide: be it supplying parts and raw materials to producers in Europe and America, or sending finished goods to emerging economies around the world. Now, with the entire country in a disarray over the insidious threat of a brand new virus, the global supply chain is dismantling faster than ever, sending shockwaves across all sectors of economic activity. The emergency mode has been activated, but there seems to be little cure for the escalation of coronavirus at the moment, or for the extremely low consumer confidence and willingness to spend, both of which have been in free fall since disaster struck.

How Did it all Begin?

The Chinese government has long been notorious for suppressing information outflow from the country, lest the world should find out about everything that goes wrong within. It took a similar approach with the coronavirus, a devastating viral outbreak, to keep the world's financial community from finding out how a disease had crept into China and that it could potentially spread through the numerous supply chains the country has access to. The coronavirus is essentially viral illness similar to pneumonia, or the flu, just deadlier and easier to spread. The incidence of this disease was officially reported by China on 30th December, long after rumours had started circulating abo