China has decided to close its economic path to stop the spread of the epidemic of the corona virus (covid-19). As the country of origin of the plague, the Chinese economy will of course be devastated. The problem is that China is a country with the second largest economic power in the world. They represent almost a third of global economic growth. In other words, if they were hit, it would have a domino effect. Namely, other countries will also be devastated and could be more serious. So, no need to be surprised if the New York Times classroom media published an article titled “China Shuts Down Economic Activities to Fight Corona Virus”. Now the world is suffering “.
As the country with the second largest economic power in the world, even the largest population in the world, China holds the economic role of many countries, mainly in tourism. In the AfDB’s notes, the five countries with the most tourist visits from China in 2018 are Hong Kong (68% of tourists come from China), Palau (39%), Cambodia (33%), Vietnam (32%) and South Korea (South Korea) 31%).
Brief analysis on Tourism Impact
With these notes, the AfDB also established four scenarios of economic influence on the tourism side. First, if tourism in China is closed 2 months (best case scenario), then 3 months (moderate), 6 months (bad) and more than 6 months (worst).
Best case scenario: Tourism from outside Asia to non-Chinese Asian countries, such as East or Southeast Asia, will decline in the same way as during SARS, around 7.7 %.
Moderate scenario: Tourism from outside Asia to non-Chinese Asian countries, such as East or Southeast Asia, will decline by around 17.7%.
Bad and worst-case scenario: Tourism from outside Asia to non-Chinese Asian countries, such as East or Southeast Asia, will drop by 47.7%.
Impact of overall losses
According to AfDB calculations, the global impact of the corona virus will be between 77 and 347 billion US dollars. This figure is equivalent to 0.1% to 0.4% of global GDP. In the same scenario, on a global scale, the potential loss of the world economy reaches 155 billion dollars and China alone, 103 billion dollars. It is in a moderate scenario. If the scenario is bad, on a global scale the potential loss of the world reaches $ 346 billion. The figure comes from the potential loss of China (US $ 236 billion), non-Chinese Asian countries (US $ 42 billion) and the rest of other countries (US $ 68 billion).
The global losses incurred due to the corona virus are indeed devastating as a result, how a country could collapse because of this corona virus. How does the world overcome exactly that? Let us all pray that this virus disappears quickly and that no victims fall because of this virus