Coronavirus Epidemic: China Crisis Infects Global Trade And Manufacturing

Hubei auto hub worst hit; authorities tries hard to revive economy

- Sumit Maitra

When Renault, maker of popular SUVs like Kwid and Duster, ventured into China in 2016 to set up its maiden manufacturing plant, it chose Wuhan, China’s automobile hub in the central province of Hubei.

“Wuhan, a traditional industrial powerhouse in central China, advances seven spots this year. High-tech industries, such as chip-making and biomedicine, continue to add growth potential to the city’s economy,” said a report on ranking of Chinese cities prepared by Milken Institute.

The city that attracted investments from 230 of the Fortune Global 500 firms, now wore a deserted look, under lockdown.

Winner’s curse

Since January 23, the deadly coronavirus outbreak in Wuhan has triggered full or partial lockdowns in 12 more Chinese cities that have severely restricted key land, air, and maritime transport routes from across the country.

“Severe disruptions to inbound and outbound air cargo shipments, trucking and rail cargo services, as well as heavy port congestion for vessels along the Yangtze River near Wuhan will likely persist as the coronavirus crisis unfolds. The regional lockdown has already severely impeded logistics operations that rely on access to highways to carry goods into and out of the region, while severe delays should also be expected on inbound and outbound air cargo shipments,” says a report by Resilience360, part of the DHL group.

As supply chain managers race to assess the potential impact of the virus outbreak on their supply chains, they will need to cope with the propagation of new or the extension of existing city lockdowns and the delayed restart of manufacturing activities in the affected areas and beyond.