China’s virus outbreak weighs on global business

Global business is catching a chill from China’s virus outbreak.

Mink breeders in Denmark called off a fur auction because Chinese buyers can’t attend due to travel curbs imposed to contain disease.

Airlines have canceled 25,000 flights to and within China after ticket sales collapsed, according to travel data provider OAG. General Motors Co. and or automakers are telling employees to limit travel to China, ir biggest market.

On Tuesday, Chinese gambling enclave of Macau anunced it was closing casis for two weeks as a precaution. territory is a big moneymaker for U.S. casi operators Wynn Resorts Ltd. and Las Vegas Sands Corp.

Global companies increasingly rely on China, world’s . 2 ecomy, as a major buyer of food, cars, movie tickets and or goods. But that has left m more exposed than ever to pain of its latest abrupt slump.

Singapore Air Show, due to open next week, anunced Tuesday it is canceling a business conference due to absence of Chinese participants.

Tourism revenue in Thailand and or Asian destinations that rely on China for up to 30% of ir foreign visitors plunged after Beijing canceled group tours. Businesspeople were told to put off foreign trips.

“Many national as well as international events are w alrey canceled,” chief executive of Kopenhn Fur, Jesper Lauge Christensen, said in a statement.

cooperative of 1,500 Danish breeders who account for 40% of global mink production called off this month’s auction of 2 million skins. Most of group’s exports usually go to China and Hong Kong.

Italy could lose up to 4.5 billion euro ($5 billion) in tourism revenue this year as virus fears keep visitors away, polling ncy Demoskopika said in a study released Tuesday.

China alrey was dealing with impact of a tariff war with Washington and a separate outbreak of African swine fever that does t infect people but has disrupted pork supplies, causing food prices to soar.

Authorities have suspended most access to Wuhan, a manufacturing center at center of outbreak, and surrounding cities in Hubei province with a total of 50 million people.

eastern city of Hangzhou, home of e-commerce giant Alibaba Group and a center for telecom techlogy companies, imposed restrictions on movement in city and said checkpoints will be set up to examine passersby for infection’s fever.

government extended end of Lunar New Year holiday to keep public at home and reduce chances infection might spre.

Streets and subways in many cities are still largely empty even after most of China officially returned to work this week. Thousands of restaurants and cinemas have been closed to prevent crowds from garing. Hollywood studios lost Lunar New Year ticket sales, usually a revenue high point for industry.

Officials express confidence China can wear latest trouble but forecasters say it could kck up to 1 percent point off this year’s growth, which might fall to as low as 5.2%. ecomy alrey was expected to slow after hitting a multi-dece low of 6.1% last year.

Forecasters including Barclays and Morgan Stanley say outbreak could depress this year’s global ecomic growth by 0.2 to 0.4 percent points.

China suffered similar woes during 2003 outbreak of SARS, or severe acute respiratory syndrome. Growth rebounded quickly afterward, and global impact was limited.

This time, even if China recovers quickly, worldwide impact could be bigger than SARS, forecasters say. That is because China w accounts for 16.3% of global ecomic activity, more than triple 2003’s share of 4.3%, according to International Monetary Fund.

anti-virus measures will drag down Chinese activity this quarter, which “will pose pressure on global ecomy and spark fears in financial markets,” Louis Kuijs, he of Asia ecomics for Oxford Ecomics, said in a report.

lockdown of Wuhan, a manufacturing center of 11 million, has disrupted production of liquid crystal and light-emitting diode panels, according to IHS Markit techlogy research, w a part of Informa Tech. That has depressed supplies and pushed up prices for manufacturers that use m in computer displays, TV sets and or products.

As curbs wear on, impact could spre, depressing auto production and sales and prices of oil, iron ore and or materials from Australia, Brazil and African suppliers to China’s huge industries, forecasters say.

China is world’s biggest importer of many commodities, including oil. price of Brent crude, benchmark for international oil tring, has fallen to about $56 per barrel from $70 in early January, partly due to weak Chinese demand.

Lower oil prices mean cheaper gas for Western consumers but y hurt exporters such as Indonesia that use revenues to help pay for schools, health care and social services.

Demand and prices “will depend on how quickly transportation and industrial activities will return to rmal levels,” Fitch Ratings said in a report.

Even smaller companies are directly affected by outbreak because of increasingly tight links with China’s nimble, efficient manufacturers.

Many manufacturers have yet to feel impact, because factories closed for up to three weeks ahe of Lunar New Year holiday. But forecasters say delays in reopening will quickly depress demand for imported components and materials such as copper and steel.

(AP Photo/Mark Schiefelbein, File)