The potential for the coronavirus to have a global

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region for manufacturing and supply chains.) The potential for the coronavirus to have a global economic impact is therefore much greater than it was 15 or 20 years ago. This has already been felt in the oil market where prices have fallen by 20% since early January, reflecting China’s position as the world’s biggest oil consumer. An extended and significant slowdown in the Chinese economy caused by the coronavirus would reduce world GDP growth and put the recent stabilisation in global trade volumes into sharp reverse. An interruption in global supply chains caused by extended factory closures in China would also have a significant negative impact on several Asian economies, with Vietnam, Taiwan, South Korea and Malaysia particularly vulnerable. There has also been a surge in overseas Chinese tourists in recent years, boosting the service sector exports of many countries, albeit modestly in most cases. But in Cambodia and Thailand spending by Chinese tourists accounts for around 5% and 3% of GDP respectively so the potential for economic loss here is significant . Policy Response As discussed above, China can do little to offset the short-term economic impact of the coronavirus other than providing extra liquidity to prevent corporate distress. However
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