China the restrictions on travel within china the

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China The restrictions on travel within China, the extended New Year holiday factory closures and the shutting of retail outlets and tourist attractions will have a significant effect on the Chinese economy . Consumer spending now a key driver of economic growth will be very weak in the first few months of this year. Capital Economics, an economic consultancy, has cut its forecast for annual GDP growth in the first quarter from 5.5% to just 3%. Note that recent efforts by the authorities to boost liquidity are designed to help companies manage short-term cash flow. They are not an attempt to stimulate the economy: the virus represents a supply shock, not a demand shock, so there is little point in trying to boost demand . Outside China
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The SARS outbreak in 2003 did have economic effects outside China but these were relatively limited and confined mainly to the East Asia region. China’s significance in the global economy is now much greater than it was 17 years ago. Its share in global GDP and goods exports has roughly doubled over this period to 19% and 13% respectively and China now plays a vital role in many global supply chains. (Hubei Province, the source of the virus, is an important region for manufacturing and supply chains.)
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