Global shipping holds its breath as the coronavirus continues to spread
By Peter Sand
Two weeks ago, we argued that – from an economic perspective – when China sneezes, we all catch the flu. Since the SARS outbreak in 2003, the global economy has become much more interlinked with China and the Chinese economy has grown to become the second largest in the world. While hard facts and reliable data are in high demand, they are in short supply, nevertheless it’s time for a more thorough diagnosis on how this affects the global shipping industry.
The coronavirus outbreak coincided with the Lunar New Year, which led to nation-wide extensions of the holiday. However, even with the passing of the holiday extensions, large parts of China remain closed. For every week that large parts of China are impacted by the outbreak, it becomes more difficult to reach the annual GDP growth target of 6%. At the very least, the first quarter of 2020 will mark a significant economic contraction compared to the last. As China gradually recovers, so will economic growth get back and shipping demand start to lift freight rates out of the current doldrums.
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