Coronavirus spread is not only threatening people’s health, but it has also become a risk for world economies. Due to the virus, China’s Asian neighbors and commodity exporters will also face difficulties, according to economists.
What is Coronavirus, and what is the situation now?
“Coronavirus is a virus that causes diseases in birds and mammals. It causes respiratory tract infections, which are generally not serious but have a risk of death, diarrhea in cows and pigs, and upper respiratory tract diseases in chickens.” as it is defined on Wikipedia. However, the current Corona Virus outbreak is more than this, according to scientists, and has enormous effects on human life and business life around the world but mostly on China at the moment.
The Chinese scientists are currently working on developing the vaccine to this virus, which is spreading inevitably fast. Together with government scientists in China, the United States and Australia, as well as those working at Johnson & Johnson, Moderna Therapeutics, and Inovio Pharmaceuticals, are all engaged. As of 30.01.2020, 170 Chinese citizens lost their lives due to the “new coronavirus,” and around 7.711 people are confirmed to have the infection.
All the countries around the world are on alert and warned by the World Health Organization to take action against the SARS-like virus, and it has been confirmed to be detected in almost 20 countries at the moment, and the WHO declared a global health emergency.
coronavirus spread
The economic impact of coronavirus spread
Asian stocks and currencies fell on January 30 as the number of people who died rose, and more cases were reported worldwide. The effects of the virus are already severely impacting China’s economy, the second-largest in the world, as companies cut back on business travel and tourists cancel trips during the traditional Lunar New Year holiday period.
A government economist said the crisis could reduce China’s first-quarter growth by 1.5-2% or less as the crisis affects sectors ranging from mining to luxury goods.
Also, it is stated that the outbreak will create a drop in Chinese tourism revenues in other parts of Asia, especially in Hong Kong and Thailand.
Turkey is among the major trading partners of China. In 2019, Turkey 19.1 billion dollars while imports with China, exports were $ 2.6 billion. Since 2002, the amount of foreign direct investment from China to Turkey reached $ 1 billion 38 million. The number of Chinese tourists came to Turkey last year to 450 thousand. Tourism is expected to be negatively affected at the first stage due to coronavirus.
As a result, tourism all over the world, including Turkey, will have a great loss since the Chinese government banned package tours outside China for a month, which can be extended later.
As economist Eswar Prasad, former head of the International Monetary Fund’s China unit stated, “A broader spread of this disease has the potential to disrupt travel, trade and supply chains throughout Asia, with knock-on effects on the world economy, since Asia is now a key driver of global growth.”
On the other hand, a weakening of the Chinese economy would affect oil demand as the country is the world’s largest importer of crude oil – importing a record 10.12 million barrels per day in 2019 – and the world’s second-largest oil consumer, according to data from the General Administration of Customs.
Important events canceled due to the coronavirus spread
Xiamen Natural Stone and Technologies Fair, one of the world’s largest natural stone fairs planned to be held in China on 16-19 March, and the World Indoor Athletics Championship, which is planned to be held in Nanjing, China on 13-15 March, were delayed due to the coronavirus outbreak.
What are the reactions of important brands?
HONDA
Honda Motor stopped production until February 9 to support efforts to prevent a coronavirus outbreak at two motorcycle factories in China. No explanation was made as to when production will resume at Honda Motor’s 3 automobile plants in Wuhan. The facilities were planned to be operational again on February 3 after the Chinese New Year holiday.
TOYOTA
The Japanese automotive giant announced that it had stopped its production in Tianjin and Guangdong in China until February 9. In addition to Honda and Toyota, PSA Group, owner of General Motors, Nissan, Renault, and Peugeot, also stopped production in China due to coronavirus.
APPLE
The company authorities have stated that they are following the situation in China very closely. They have reduced the number of working hours of their employees in Apple stores in China and limited their travels. The factories which are producing for Apple have stayed closed for more than it is expected, and the mass production, which is planned to start in the third week of February, may be delayed due to the coronavirus.
Google is shutting down all its offices in China temporarily, which are located in China, Hong Kong, and Taiwan, according to the technology website, The Verge.
Together with other U.S. companies, Facebook has also restricted travel to China to keep its employees safe. As Business Insider stated, the company stated that they would not allow the staff to go to China unless it is necessary, they would have a special permit requirement for the staff who had to go to China and would be very sensitive to the issue.
IKEA
Ikea announced that they have temporarily closed all its stores in China due to the coronavirus outbreak. They have 30 stores around China, and half of them closed while the rest shortened their opening hours.
STARBUCKS
Kevin Johnson, CEO of Starbucks, told CNBC that they have closed more than half of its stores in China and wouldn’t hesitate to close more if necessary. The remaining Starbucks shops required people to have their temperatures taken and to wear masks.
International Flights and Transport Links
Turkish Airlines, British Airways, American Airlines, Air Canada, Iberia, Air France, KLM, Lufthansa, Delta Airlines, El Al Israel Airlines, Seoul Air of South Korea and Lion Air Group of Indonesia have canceled, suspended or reduced their flights to and from China because of coronavirus. Other airlines have also started to cancel or suspend their flights to and China since the death toll and number of infected cases increase.
Kazakhstan government declared that it had stopped issuing visas to Chinese citizens and will cut all primary transport links with China. Passenger train services, cross-border bus journeys are suspended as well as regular flights between the two countries.
The government of Russia has also announced that they will limit the number of passenger trains starting from 31.01.2020 and will be active between Moscow and Pekin only.
Comments
Within the light of all this information, the coronavirus spread may have inevitable consequences on the world’s economy, and these consequences may be negative or positive for some countries, depending on their situation. Depending on the progress of the spread of the coronavirus, the world’s economy may experience great changes.
Although the negative effects have been stated in this article, it should be noted that for some countries which are competitors with China in terms of production facilities such as Asian countries, Middle East countries and Turkey, etc., this outbreak may have a positive effect. In the case of a nationwide quarantine in China, all the production facilities and factories would be shut down, and manufacturing would stop. At that point, international brands would look for other alternatives to continue their production. Obviously, among all the other countries, Turkey has an outstanding advantage of its location.
Not only Turkey’s geopolitical position puts the country one step forward, but also production facilities of high quality and high capacity, cultural similarities between European countries are all its advantages compared to Asian and Middle Eastern countries. As a result, Turkey may be the new production hub for important international brands who would like to benefit from the ease of transport, accessibility of the manufacturers, cheap workforce, and customs union with the European countries.
In 2019, 84.102 new companies founded in Turkey. More than 86% of the newly established enterprises were joint-stock companies, while 13.6% were joint-stock companies.
The Administration for the Development and Support of Small and Medium-sized Enterprises (KOSGEB) provided a total of 1 billion 5 million 363 thousand 551 TL between the years 2015-2019 to 55.046 enterprises owned by Turkish women entrepreneurs.
The Regional Director of the Islamic Development Bank (IDB) Group in Turkey, Salah Jelassi, commented on the IDB’s new strategies and Turkey’s current position. “In a climate where investment opportunities are limited worldwide, Turkey continues to be a secure hub for investors,” said Sallah Jelassi, Regional Director of the Islamic Development Bank (IDB) Group in Turkey.
The Turkish Government is working on a new project these days. According to the Turkish President, the European side of Istanbul may soon find itself transformed into an island. As Hürriyet Daily reports, Recep Tayyip Erdogan has reaffirmed his intention to dig a deep canal through the city linking the Black Sea and the Sea of Marmara. “We are going to launch the Canal Istanbul very soon,” said the Turkish leader, considering that “it is not possible to reduce traffic on the Bosphorus.”
The Turkish authorities have begun construction of a new metro line for New Istanbul Airport which is between Istanbul’s financial district, Gayrettepe, and theNew Airport, as the Daily Sabah daily reported on Sunday.
Turkish exporters were supported with 3.2 billion TL ($543.2 million) in 2019, which is a record in the history of the Republic, as the Minister of Trade stated.
After achieving high investment volumes in challenging market conditions last year, the EBRD plans to increase its investment in Turkey in 2020 as the economy prepares to recover.
The Turkish government is supporting the companies to develop new projects in their industries and we have gathered some of them here. In this article, you will read about the latest projects of Turkey in 2020 in the following sectors: energy, environment, transport, industry, automotive, and innovation.
Around 1.35 million houses were sold in Turkey in 2019 as the Turkish Statistical Institute (
The chemical industry in Turkey, which set a record in 2019 with the export of 20.6 billion dollars, became the second most exported sector in the past year. The chemical industry has drawn attention to the increased export performance, exporting more than 3 billion dollars in 2019, among the industries increasingly growing 18.54 percent of exports to Turkey and could be a growing industry.
The Central Bank of Turkey cut its benchmark interest rate by 75 basis points, beating most economists’ forecasts and risking a possible liquidation of the pound.
Following Oppo, Xiaomi, and Huawei, one more Chinese smartphone producer is preparing to offer its products to Turkish consumers in January 2020 in the technology markets in Turkey.
Sanmar built the world’s first LNG tugboat and the first autonomous vessel, which is the first hydraulic hybrid tugboat. Boğaçay XXXVIII appointed environmental tug, will join the Turkish fleet, and serve in Izmit.
BGC Partners has released a report on the expected Turkish asset base in 2020. In the first half of 2020, growth in the Turkish economy is expected to increase as business concerns have faded, and expansionary policies of central banks have diminished. Agency forecast that Turkey is expected to experience a balanced growth of 3 percent in 2020.
2023 Vision Project of Turkey was born about 15 years ago when the Turkish government began to change direction. They were not content to be mere background players and wanted global recognition.
Danish drug manufacturer Novo Nordisk, which is best known for its leadership in diabetes care, will run operations in 73 countries with a population of about 1.6 billion people from its headquarters in Istanbul by making it the management hub of the company.
A Silicon Valley investor is leading a $40 million financing for the ultra-fast delivery company Getir which is a Turkish start-up.
With 15,644,108 tourists welcomed in 2019, the seaside city of Antalya, in southern Turkey, breaks an all-time record among all the other cities of Turkey.
The TurkStream pipeline, which will supply Europe with Russian gas via Turkey, officially started operating on 08.01.2020. An official ceremony was held in Istanbul, led by the President of the Republic of Turkey, Recep Tayyip Erdogan, and the President of the Russian Federation, Vladimir Putin.
Turkey’s first domestic fighter jet will make its first flight with a domestic engine by 2029, while negotiations to recruit international partners are ongoing.
The U.S.-based clean technology company, Taronis Technologies, will open a facility in Turkey to operate the gasification units, the company stated in a press release on Saturday. The company is in the process of providing technological solutions to renewable fuel and sterilization problems through the use of its clean gas technology.
Facebook is preparing to open eight offices in Turkey, of which the center will be in Istanbul. The first office will be opened in Bursa in January to discover young entrepreneurs. Each of the offices will be established in different cities.
The presentation ceremony of the first 100% Turkish electric car took place in the Gebze district of Kocaeli province in the northwest of the country. The vehicle, unveiled in the presence of President Recep Tayyip Erdogan, will come in five models and 175,000 units in one year. The all-electric car will have a range of up to 500 km and a locally produced lithium-ion battery that can be recharged to 80% in less than 30 minutes.
Meanwhile, production plants for Turkey’s first car – which will also be electric – will be inaugurated in the west of the country by presidential decree. According to the decision published in the Official Gazette on 27 December with the signature of President Recep Tayyip Erdoğan, the plant will be set up in the province of Bursa with the help of the government on a project basis. Around 4000 people will be employed, including 300 qualified personnel.
Are you interested in working in Turkey? Or are you assigned to a position in Turkey by your company? If yes, you should know that the first step for a foreigner to work in Turkey (independently or as an employee), you will need a residence permit and a work permit. Law No. 4817 on Work Permits for Foreigners and its Implementing Regulations constitute the legal basis for work permits for foreigners. Work permits are issued for a minimum period of six months. The application takes at least 1.5 months.
