Nowadays, there is a new outbreak of COVID-19 in the world, and many countries have the possibility of a large outbreak. So what impact will the new global epidemic have on China and how much impact will it have on China’s manufacturing industry?
As a large manufacturing country, the production and export of industrial products are very large-scale. The intensification of the global epidemic is bound to affect the development of China’s manufacturing industry.
Due to the domestic epidemic situation, many companies have delayed resumption of production after the Spring Festival, which directly led to a sharp decline in the company’s first quarter revenue, and employees still need to pay wages during the delay period, that is, there is no output but expenditure. For some small enterprises or companies with poor asset and debt conditions may have a fatal impact. However, with the control of domestic epidemic situation, policy support and resumption of production, the situation has improved.
The global epidemic affects domestic manufacturing through exports. In 2019, the total industrial output value of various industries across the country is 90.39 trillion yuan, and the export delivery value is 10.68 trillion yuan. The export value accounts for about 12.8% of the output value. From the data, it can be seen that the income derived from exports in China’s industrial enterprises is still not small, and production in many countries affected by the epidemic has stalled and the level of living consumption has also decreased. This will directly affect orders for industrial products imported from China. In addition, from the perspective of China’s export structure, the EU and the United States account for the largest proportions, accounting for 14.8% and 13.7% respectively, but these two regions are particularly affected by the epidemic, so the impact of China’s manufacturing industry is still not small.
If domestic policies are relaxed, companies are encouraged to invest or borrow money to invest, and the potential for consumer consumption will be stimulated, it will reduce manufacturing pressure to some extent. Moreover, due to the impact of the epidemic and the collapse of the US stock market, the prices of many foreign products and assets have declined. This has given domestic opportunities to purchase raw materials such as oil, iron ore, natural gas, and agricultural products. When the epidemic ends, foreign products there may be a substantial increase in demand, which gives another export opportunity.
Therefore, although the impact of the epidemic is unavoidable, it still implies development opportunities, and it is also possible to use this time to achieve high-quality transformation.