The Coronavirus Is Hammering China’s Economic Outlook

By 

James T. Areddy

Updated March 2, 2020 12:09 am ET                                       
The coronavirus has been an economic issue in China since so many of their citizens are sick and not returning to work. Many do not want to go out because they do not want to get exposed to this outbreak or they are contagious with it and physically can't go to work. There is a weakness in tourism, restaurants, transportation and construction. This ultimately makes for an economic drop without these four things expanding. It is also causing a low in production and demand from international transportation of goods. 
Many economists are predicting that the GDP in China is going to drop. In order to keep this from getting worse, the cabinet decided to cut taxes for small businesses and state-owned banks to have cheaper loans and longer grace periods. This will cause people to borrow money to pay their bills and eventually repay it. The Central Bank has made a change to reduce interest rates to save the citizens from not being able to pay them. In addition, the Central bank put billions into the domestic financial system to support the banks and help the economy. 
The main reason for the businesses in China to struggle is there is no movement in people. Meaning people are not going anywhere or doing anything. But on top of that, there is no travel of other countries coming in and out of China. This has caused the government to do something about this virus. The government is reported to have smoothed out the number of infectious cases. 
The main effect right now in the economy is the smaller companies since they are unable to pay for their employees and have a less stable income. There is not much wiggle room to make an error with a situation as extreme as an incurable virus. 
China is hoping that this economic drop is short term and they are hoping to get back on their feet once this is over. Since China's economy is so big it plays a role into other economies with transportation or goods and travel. This virus has caused so much kayos and there is hoping to be a light at the end of the tunnel with what is going on. Not only is this Virus effecting China, it is effecting every country it has spread too.