The Abacus

Business Grapples with Impact of the Coronavirus

By: ACBC National
05-02-2020

As of Wednesday, the global death toll of the coronavirus stood at 426, eclipsing the total number of fatalities from the SARS virus in 2002 – 2003.

However, health experts claim the nature of the virus does not appear to be as deadly as SARS, citing the encouraging number of recoveries in recent days. SARS had a mortality rate of 9.6 percent compared to 2 percent for the coronavirus.

Since the outbreak, the Chinese government has imposed a mandatory curfew on more than 30 million people in Hubei Province and around the city of Wuhan, where the coronavirus originated.

The Australian government currently recommends that Australians do not travel to China due to the increased risk of coronavirus and that those currently in China leave as soon as possible. Many airlines, including Qantas, have temporarily ceased their services to and from mainland China.

While the full impact on the Australian economy remains to be seen, many China-focused sectors are already feeling the effects of the coronavirus. High flow Australian exports to China, such as seafood and fruit have seen orders cancelled while a temporary travel ban on Chinese citizens into Australia is affecting international education and tourism, where China is the largest contributor to both sectors.   

Late last month, the Geraldton Fisherman’s Cooperative suspended lobster exports and reduced the price per kilo to AUD $0 as demand diminished over the Chinese New Year period, stemming from Chinese Government directives discouraging mass gatherings and banquets.

The effect has been felt throughout Australia’s seafood industry, which usually enjoys a peak in exports to China around Chinese New Year. Even the domestic seafood market has been hit with most live seafood typically bought by travelling Chinese tourists, who are currently prevented from entering Australia due to a decision by the Australian Government to stem the spread of the coronavirus.

The travel ban from the Australian Government also affects Chinese international students due to start the university semester with 106,680 (56% of total cohort) Chinese international students stuck outside of Australia. Monash University announced it would push back the start of semester one by one week. The University of Sydney and University of New South Wales has offered students the option of late enrolment to ensure they can attend the semester. The University of Tasmania said it will offer online courses to those affected by the ban.

According to Phil Honeywood, chief executive of the International Education Association of Australia, the impact of the coronavirus could cost the sector between AUD $6 and AUD $8 billion if the fallout continues throughout the first semester.

The more than 200,000 Chinese students in Australia and the 1.4 million tourists are worth a combined $16 billion to the economy each year. The Federal Treasurer Josh Frydenberg remarked that "it's too early to give a definite view about the economic impact because we don't know how severe and how sustained the virus outbreak is."

Looking ahead to getting business back on track, Tourism Minister Simon Birmingham addressed an emergency meeting of the Tourism Australia board over the weekend and called for a campaign to support and reassure the Chinese students and tourists affected by the crisis once the temporary travel ban is lifted.

Of the 20,588 confirmed cases world-wide, only 13 have been reported in Australia that have not developed into critical situations. The situation remains fluid and is being closely monitored by Australian officials.

The Australian Department of Health currently advises a 14-day period of self-isolation for those who have travelled to Hubei Province within the last 14 days and those who have left or transited throughout anywhere else in mainland China since February 1.

For regular updates on the coronavirus, visit https://www.health.gov.au/health-topics/novel-coronavirus-2019-ncov#latest-news

Picture: AP / Kim Cheung

@AusChinaBC

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