The 2019-nCov or better known as the Novel Coronavirus, has for many people, marred the beginning of the year 2020. With more than 30,000 infected persons across 25 countries, extreme measures are being employed to reduce the risk of the virus spreading. The outbreak, which started in the Chinese city of Wuhan, continues to have an effect on people’s lives, science, businesses and economies.
What is the coronavirus?
The Novel coronavirus, also known as 2019-nCoV, is a respiratory virus that had first been identified in December of 2019. The virus was found to have originated in the city of Wuhan, located in the Hubei province of Central China.
There are different types of coronaviruses that may cause respiratory diseases, which can range from a common cold all the way through to full blown pneumonia in more serious cases. The symptoms can vary from case to case, with some people not experiencing any symptoms at all. Even though severe cases can result in death, it is possible to make a full recovery from the coronavirus, with the current number of recoveries exceeding more than 1,600.
Although other forms of coronaviruses have previously been identified, the 2019-nCoV differs significantly from the others and therefore requires its own form of control and treatment.
Effects of the coronavirus
The outbreak of the virus has extended far beyond the infected persons and now impacts how people live their daily lives. Families, businesses, the Chinese economy and even the world economy are all feeling the effects of the virus.
The vast majority of people residing in mainland China have had their daily lives impacted by the disease. Children are unable to go to school, adults are not able to go to work and movement of people has been restricted. However, these important precautionary measures that have been put in place, are highly necessary to reduce the risk of the virus spreading.
It is important to note that although the number of infected persons is seemingly high, the mortality rate of the virus, as of the 7th of February 2020, is less than 2.1%. In addition, more than 70% of those infected are in the Hubei province.
Coronavirus and business
It is still too early to quantify the full effects the coronavirus will have on businesses, however, it is evident that extensive planning is required for any business with connections to China.
Within the borders of China, local governments have imposed sanctions, restricting businesses from operating normally in order to contain, or at least restrict, the spread of the virus. Although these restrictions are imposed for people’s safety this, in turn, means a major slowdown in production.
Shops, restaurants, bars, shopping malls and entertainment venues, amongst others, have all had to close their doors in order to limit the spread of the virus. By closing their doors, they have immediately felt the collateral effects of the virus.
Labor restrictions have been imposed on enterprises, causing a vast number of them to cease operations for the time being. However, expenses still need to be paid, including human capital expenses, even though many people are unable to go to work. With major cut downs on time, salary adjustments and staff rotation, businesses are encouraged (and in certain cases provided subsidies) to avoid layoffs.
The manufacturing industry has similarly seen a halt to operations, critically affecting manufacturers as well as suppliers around the world who have integrated supply chains running through China. For many suppliers, whether short term or long term, a reduction in supply will impact operations.
There may be far reaching implications for Chinese manufacturers as suppliers and buyers from all over the world, may be reluctant to purchase goods from China.
In spite of the risk the virus poses, there are many positives we can take away. With low mortality rates and extensive measures being taken to reduce the spread, the direct impact of the disease may be mitigated. This is significant especially in comparison to other diseases experienced in the last 2 decades. Despite the unknowns surrounding the virus, efforts in research are being ramped up and public health officials on the frontline are working around the clock, committed to reducing the spread of the coronavirus.
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