The coronavirus epidemic is paralysing the Chinese economy – new figures from the customs administration reveal how badly exports are affected. According to these figures, exports are literally collapsing compared to the same period last year. The crisis is also affecting German companies.
China’s foreign trade has fallen sharply against the background of the coronavirus epidemic. For the first time since the outbreak of the lung disease Covid-19, the Beijing customs administration presented trade figures. According to these figures, China’s exports in January and February fell by 17.2 percent compared with the first two months of the previous year to a value equivalent to 292.45 billion US dollars (259 billion euros). Imports fell by four percent to 299.54 billion dollars. Overall, foreign trade thus shrank by eleven percent.
The strict measures against the spread of the coronavirus had practically brought the Chinese economy to a standstill since the end of January. According to the Customs Administration the decline in foreign trade is “mainly due to the effects of the coronavirus outbreak and the spring holidays”. Around the Chinese New Year which fell on 24th January this year virtually all companies in China closed down anyway which is why the effects of the coronavirus outbreak were felt above all from February onwards. Factories and companies are only slowly resuming work.
A weakening economy in China also has noticeable consequences for Germany. The People’s Republic is an important sales market for German companies. Last year the export volume was 96 billion euros.
“Effects are generally bad”
Since 2015, the second largest economy in the world has also been the country from which most imports to Germany come. German companies operating in China are particularly struggling. “The effects are bad overall,” stated the German and European Chamber of Commerce in China after a survey of member companies at the end of February. Almost 90 percent of the companies reported “moderate to severe effects” due to the lung disease.
The industry considers the risk of a recession in Germany to be considerably increased in view of the consequences of the virus. “Economic growth is threatening to almost come to a standstill,” the new quarterly report of the Federation of German Industry said this week. If there is no economic normalization in the countries affected by the coronavirus epidemic in the second quarter, the BDI expects a decline in economic output for Germany for the year as a whole.