Chinese Manufacturing Struggles to Rebound Amid Outbreak

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As the coronavirus outbreak continues to spread through China and globally, the Chinese manufacturing sector has taken a massive hit. Despite efforts from those in Beijing to try and boost production, experts still claim it may take months for things to return to normal.

In fact, most of the issues come not from the virus itself, but the measures put in place to fight it. China has begun closing factories, limiting travel, and practically shutting off entire cities from the outside world. This has meant that the Chinese supply chain, well-known for its resourcefulness, now lacks both workers and raw materials.

As a result, practically every manufacturing sector in China has been impacted. For instance, smartphone component production is down up to 10% in some areas, and companies like Apple are planning for potential disruptions to their production facilities. However, it’s travel and retail companies which rely on Chinese customers who have been hit the most.

Meanwhile, many of those in the automotive industry are slowly beginning to restart production. Still, they and other industries aren’t expected to reach normal production levels until mid-March. Other reports push this recovery back until mid-May or later. These are both based on if the virus doesn’t turn into a global epidemic, which the World Health Organization claims could happen.

In Beijing, President Xi Jinping has started to take steps to revive the industry in the country. Tax cuts are being promised, while “low-risk” areas are encouraged to shift back to production. Meanwhile, “high-risk” areas should continue fighting the spread of the disease. A loosening of transportation is also being encouraged, so workers can more easily get to work.

As this goes on, companies are looking for other nations to quickly restart production. The American Chamber of Commerce in Shanghai reported that half of the 109 companies surveyed had their global operations disrupted due to the virus. But, with over 30 years of companies relying on their labor, Chinese prices and services are still hard to beat.