Companies warn of an economic crisis as China battles coronavirus

RARELY HAVE plans in China fallen apart so swiftly and so publicly. On January 12th the leaders of Hubei declared that the province’s GDP would grow by 7.5% this year. They made no mention of a new virus fast spreading through its towns and cities. But less than two weeks later it could not be ignored. They placed the province under quarantine, hemming in over 50m people and rendering this year’s flashy growth target almost certainly unreachable.

The lurch from confidence to anxiety has echoed throughout China. In the months before the coronavirus outbreak, the stockmarket had rallied and businesses had been upbeat, not least because China and America had struck a trade deal. But optimism has crumbled as officials have begun to fight the epidemic.

The Chinese stockmarket has fallen by 10% since January 20th. Factories and offices were supposed to reopen in recent days after the new-year holiday. Most provinces have ordered them to stay shut until at least February 10th. Farmers have warned that their chickens might starve because roadblocks have snarled their feed supplies. Few people dare venture out, hitting restaurants and hotels especially hard. In an interview that attracted much attention before being censored, the founder of Xibei, a restaurant chain, said that if the lockdown persisted for a few months, vast...



via The Economist: Finance and economics Business Feeds

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