27 March 2020 – The coronavirus disease 2019 (COVID-19) is causing a slowdown in world trade, disruption in global supply chains, changing tourism flows, and pressuring Chinese economic growth. The complexity of global supply chains means that businesses may be reliant on Chinese products without being aware of it. South African companies that have built markets on the back of an integrated global trade network need to be aware of, and ready to act on, the vulnerabilities that their trade dependence creates.
According to research by the International Monetary Fund (IMF), a one percentage point drop in Chinese growth would reduce South African growth by 0.2 percentage points. Based on the latest South African Reserve Bank (SARB) predictions, this would cut GDP growth to 1.0% this year. This calculation is based on the anticipated impact of trade disruption on the local economy. From an export perspective, for example, under-pressure Chinese steel and copper manufacturing industries will have weaker demand for South Africa’s largest exports – mineral ores – to China. Many of South Africa’s industries will see an adverse impact from COVID-19, including mobile operators, automotive manufacturers, as well as hospitality and retail establishments. Download Full Report: https://pwc.to/39msBav Source (PWC)