Global Manufacturing Upended By Coronavirus Outbreak
China is a major economic superpower in part of its large manufacturing prowess. The country produces semi-finished materials and different parts of products that are then completed in other manufacturing companies throughout the world. Different countries’ economies have become interconnected with Chinese manufacturing.
The coronavirus outbreak is weakening that interconnected reliance for finished products and sending ripples throughout the world economy. For example, General Motors will have to slow production of its sports utility vehicles because it has not received necessary parts from China. In Bangladesh, a company that produces blue jeans cannot complete its orders because it has not received the denim it has ordered from China.
China did not always have this powerful position in the world economy. Today, the country’s economy accounts for one third of global GDP growth. 20 years ago, it only accounted for 3% of global GDP growth.
Some state leaders are calling for government intervention to help reduce the economic hardship that can result from the outbreak.
“The current situation is more serious than we thought,” South Korean President Moon Jae-in said. “We need to take emergency steps in this time of emergency.”