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of Congo, Ethiopia, Ghana, Kenya, Mauritius, Nigeria, South Africa, Tanzania, Uganda and Zambia (Sawlani, 2020). There is a large amount of travel between China and Africa; hubs such as Addis Ababa, Cairo and Nairobi are at particular risk owing to the large number of Chinese travellers that pass through these airports. Countries including Côte d’Ivoire, Mauritius and Mozambique are taking measures to quarantine and check Chinese travellers. African carriers that have cancelled flights to China include RwandAir, Kenya Airways, Royal Air Maroc, EgyptAir, Air Madagascar and Air Mauritius; Air Tanzania has postponed its maiden flight to China. Notably, Ethiopian Airlines and Air Algérie have not yet banned airline access. Other countries such as Australia, New Zealand, Singapore, the US and Vietnam are among countries that have denied entry to foreign nationals who have recently been in China. The border between China and Russia has closed. 3
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5 3.2 Directly observable economic impacts While it will take time before the measured impacts become visible (which is why we examine vulnerabilities in Sections 4 and 5 and possible impacts in Section 6), a number of directly visible impacts on stock prices and commodities are already visible. Airlines are banning flights and their stock prices are declining. The global travel insurance industry is already concerned: more than a dozen airlines, including British Airways, American Airlines and Cathay Pacific, have cancelled some or all of their flights to and from mainland China. These airlines will need to offer refunds or rebook on to different flights. 4 When markets opened after Chinese New Year they finished down by 6% on 26 January 2020. Many factories have closed indefinitely, some indefinitely, which is not what happened under SARS in 2003. Nissan and Apple have closed down some subsidiaries in affected areas. The stock market price of China Southern Airlines fell by 7% and that of Luckin Coffee by 10%; Macau gambling activity also fell. 5 Apple shut down all of its 42 retail stores. There may also be supply chain effect on sectors such as electronics. On 3 February stock market prices fell by another 8%. 6 Transport sectors will be affected in a major way. This will reduce the demand for fuel. Oil prices have already declined, from $68 per barrel (Brent crude) to $58 at end of January and $54 on 3 February 2020, with most of the decline over the past two weeks. A reduction in oil demand of 20% is expected (Durden, 2020). Oil prices may stay lower than would otherwise have been the case (note that geopolitical tensions can have major effects on oil prices). Other commodity prices are also affected. On 3 February, copper prices immediately fell by the daily limit of 7% to 44,780 yuan a tonne on the Shanghai Futures Exchange. This was the lowest since November 2016, before the price ended down 6.5% at 45,040 a tonne (Hobson, 2020).
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