Coronavirus Could Be The End Of China As A Global Manufacturing Hub

The new coronavirus Covid-19 will end up being the final curtain on China’s nearly 30 year role as the world’s leading manufacturer.

“Using China as a hub…that model died this week, I think,” says Vladimir Signorelli, head of Bretton Woods Research, a macro investment research firm.

China’s economy is getting hit much harder by the coronavirus outbreak than markets currently recognize. Wall Street appeared to be the last to realize this last week. The S&P 500 fell over 8%, the worst performing market of all the big coronavirus infected nations. Even Italy, which has over a thousand cases now, did better last week than the U.S.

China On Hold

On January 23, Beijing ordered the extension of the Lunar New Year holiday, postponing a return to work. The coronavirus was spreading fast in the epicenter province of Hubei and the last thing China wanted was for that to be repeated elsewhere. Travel restrictions and quarantines of nearly 60 million people drove business activity to a standstill.

Trump-backed Republican keeps crucial congressional seat in GOP hands with special election victory

NYC alleged dine-and-dash influencer Pei Chung evicted from luxury apartment as she sits in jail

Illegal immigrant gang member killed police K-9 ‘Spike’ before officers returned fire in California: source

Young progressive beats out establishment candidate in Jersey City mayoral race, echoing Mamdani

GOP Rep. Elise Stefanik Says She Caught Mike Johnson Telling ‘Lies’ and Secretly ‘Siding with Jamie Raskin’

Breaking: Trump Officially Invalidates All Documents Signed by Biden Autopen, Including Pardons – Fauci, Hunter Biden Now Vulnerable

Watch: The Fieriest Trump Comments in History Just Came Out During Cabinet Meeting – POTUS Utterly Scorched Omar and Somalis, Calling Them ‘Garbage’ from ‘Stinking Country’

Trump doubles down on voiding Biden autopen actions, including pardons and commutations

Video: Can You Spot What German Cities Added to Their Christmas Markets After Muslim Migrants Flooded the Country?

Top expert exposes how elites are encouraging immigrants to not assimilate into American culture

Witkoff and Kushner leave Kremlin after nearly five hours of negotiation with Putin

Trump hails $6 billion generosity of Dell family, teases more investors for ‘trust fund’ for American children

Portland drops ‘Christmas’ from tree lighting ceremony featuring ‘Free Palestine’ chant

BREAKING: Afghan Shooter Pleads Not Guilty to All Charges in National Guard Murder Case

Chip Roy Floats Congressional Action on College Football After Lane Kiffin Fiasco: ‘Isn’t Supposed to Be an NFL Lite’

The most frightening aspect of this crisis is not the short-term economic damage it is causing, but the potential long-lasting disruption to supply chains, Shehzad H. Qazi, the managing director of China Beige Book, wrote in Barron’s on Friday.

Chinese auto manufacturers and chemical plants have reported more closures than other sectors, Qazi wrote. IT workers have not returned to most firms as of last week. Shipping and logistics companies have reported higher closure rates than the national average. “The ripple effects of this severe disruption will be felt through the global auto parts, electronics, and pharmaceutical supply chains for months to come,” he wrote.

That China is losing its prowess as the only game in town for whatever widget one wants to make was already under way. It was moving at a panda bear’s pace, though, and mostly because companies were doing what they always do – search the world with the lowest costs of production. Maybe that meant labor costs. Maybe it meant regulations of some kind or another. They were already doing that as China moves up the ladder in terms of wages and environmental regulations.

Under President Trump, that slow moving panda moved a little faster. Companies didn’t like the uncertainty of tariffs. They sourced elsewhere. Their China partners moved to Vietnam, Bangladesh and throughout southeast Asia.

Enter the mysterious coronavirus, believed to have come from a species of bat in Wuhan, and anyone who wanted to wait out Trump is now forced to reconsider their decade long dependence on China.