On March 4th, the death toll from the new coronavirus in China exceeded 2,981 and infected cases increased to 80,270. In addition, there are 3,220 deaths in all 82 countries and 94,199 people are infected.

           With the spread of the coronavirus, tourism is shrinking worldwide. According to KBS, the Korean broadcasting company, Chinese tourists have spent more than 30% of the world's travel retail sales in recent years. However, due to the influence of the coronavirus, the Chinese are rejected to entry. 17 countries, including the United States (U.S.), banned or restricted Chinese or foreigners staying in China. Moreover, nine countries, including Russia, suspended or restricted issuance of visa to Chinese. The coronavirus has also affected travel in China. As stated by KBS, the number of tourists to Macau from China decreased 82% from last year. International Civil Aviation Organization (ICAO) said, 70 airlines have canceled all international flights to China and the number of flights of 50 companies has decreased. As a result, the capacity of direct international flights to China dropped by 80%, while that of Chinese airlines decreased 40%. ICAO also said that due to the decline in Chinese travelers, sales in the first-quarter of the Japanese tourism industry will lose 290 million dollars.

           The coronavirus has also affected many companies around the world. Multinational companies such as Starbucks and McDonald’s closed their stores and producers such as Volkswagen and Toyota shut down their factories in China. Therefore, according to the market research firm Strategy Analytics, the mobile manufacturing industry, which China accounts for 70% of the factories all over the world, is inevitable to suffer a heavy blow. Due to this, major financial institutions are downgrading their forecasts for the global economy this year. Moody's Analytics, the international credit rating agency, lower the GDP growth of the world economy by 0.3%p from 2.8% to 2.5%.

           Kim Young Han (Prof. of Economics, SungKyunKwan University) said “The coronavirus has brought direct shock in the tourism industry and the manufacturing industry that had received parts supplies from China. As the international supply chains collapses, the global supply chain of industries linked to manufacturing in China, is shocked by the sharp drop in demand. In the future, the negative impact of shrinking demand throughout the industry will be seen in the entire industry.”

By Lee Un-Seok, Desk Editor

stst060500@pusan.ac.kr