Businesses, especially the small companies that drive the Chinese economy, are in worries about the economic damage by an outbreak of coronavirus. It is causing a lack of business and soon may lead to job cuts unless the government contains the outbreak soon. 

A High cost of labor 

A travel ban, especially in the province with most of the coronavirus infections, has immobilized many workers from returning to work stations. It happened after celebrating the Chinese New Year. A significant number of workers had traveled.   They are sitting without offering their service, thus slowing down production.   

The Chinese government, in reaction to the coronavirus outbreak, was to firewall nearly 100 million people in Wuhan City and entire central Hubei province after the virus spread. They travel ban is having an impact on all the economic sectors as quarantine is restricting the movement of workers. It is not just manufacturing feeling the pain. Quarantine is affecting work at hospitality, retail, insurance, and airline sectors. 

Migrant workers make up a large part of the workforce in the Chinese manufacturing area.  A travel ban has hit migrant workers harder than anyone else. They search for new employment in the New Year but now must wait longer. Widespread prejudice against these workers portrays them as carriers of Coronaviruses. They cannot earn, and their impact on the economy by spanning becomes lesser each day.  

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Potential employers are grappling with an increase in the cost of hiring laborers due to a severe shortage. For instance, Li, a factory owner at Tangshan, is paying higher salaries by 150%, yet it is far from the epicenter of the virus. He laments that “almost nobody is available.” 

Nonworking holiday extensions  

Chinese authorities extended the New Year holiday by days, and some provinces are still delaying complete resuming of business. The purpose is to ensure success in quarantine. Manufacturers are suffering the effects as they are paying bills, including salaries for employees who are not at work. Those that are working are yet to reach their capacity.     

Economists forecast cash flow problems, especially for smaller operations.  A resumption of business is not an immediate relief because some buyers are reluctant to buy goods from China. 

Lower commerce  

Many customers of Chinese products are shifting their supply chain away from China. They fear traveling to china or important product with a negative view that they might have the virus. Many overseas airlines stopped flights to china, making it difficult for traders to shop and ship out their cargo from china.  Hotels chains in the absence of travel are offering refunds. It means they miss out on hotel and restaurant profits. 

A report by Alibaba, the major Chinese technology corporation, states that the virus has been undermining production because many workers cannot perform their jobs.     A low number of laborers are causing a shortage of products and products.    

For instance, Foxconn, a manufacturing partner of Apple in China, has been facing production delay. Some carmakers such as Hyundai and Nissan have closed their factories outside china for a moment because they cannot get parts. 

Canceled flights and hotel bookings 

Over a dozen airlines have scaled back or canceled flights to china.  It is a loss to China, the second-largest aviation in the world after the United States.  

Many would-be travelers to china cannot fly to their destination due to the cancellation of thousands of flights. Chinese national carrier cannot capitalize on the situation because it is not every country that is allowing entry of passengers from china through the airport.  

Travel bans and limitations have been reducing the number of airports where a plane from china can access.  Chinese airlines also have to limit the flights in the domestic routes due to efforts that the government is making to contain coronavirus outbreak. 

Flight ban is affecting the hotel business. Hilton hotels are one of the biggest casualties. It has closed 150 Hilton hotels across china because of concerns about virus spread in public places and lack of demand. These hotels represent 30,000 rooms. 

It is impossible to determine the complete impact of coronavirus on the Chinese economy but is suffering due to limitations in business opportunities.