How Australia is Responding to the Corona Virus Outbreak, and the Flow On Effect in Trade Relationships with China
The Corona Virus is now creating an impact on business, markets and client bases around the world. China is a a mega global player on the world stage and what happens there impacts us all. China is Australia’s second largest trading partner.
Currently in Australia:
The US and Australia have said they will deny entry to all foreign visitors who had recently been in China where the virus first emerged in December. Airlines, including Qantas, Air New Zealand, Air Canada and British Airways, cancelled or scaled back flights
Hotel chains, including Hyatt, Radisson and Hilton, extended their cancellation policies for guests travelling to China.
Australia has denied entry to Australia to people who have left or transited through mainland China from 1 February 2020. The exception is for Australian citizens, permanent residents, their immediate family and air crews. Those arriving residents must remain in isolation for 14 days.
The Australian Government recommends no travel to all of Mainland China
Live animal exports, (including live fish and lobster), to China have been cut affecting both wholesalers and retailers. As the prolonged effect is unknown, it is anticipated that there will then be a lag in supply even when the emergency is over, as current stocks will need to be otherwise dealt with, and new supplies generated when the market re-establishes
General exports from Australia to China are restricted by lack of freight space due to lack of flights, and timing of fresh produce with limited shelf life
Investors have sold down China exposed stocks on the SSX
Wuhan hosts production facilities for seven major domestic and foreign manufacturers represented in Australia, and for hundreds of auto parts suppliers, which will effect both ends of the supply chain if production is limited by local labour restrictions and limited freight opportunities. Complicated supply chains and just-in-time production could mean that production outages in Wuhan factories have broader spill over effects. Hyundai has put out a warning that they may not be able to source parts in the foreseeable future.
Needless to say the above is just a brief reflection on this ever changing situation, but regardless of what is coming down the track, we need to be aware and up to date to be able to support our client base in the weeks, or months to come. Global markets are already flagging the slowing of oil production, downward figures in tourism, and breaks in supply both in and out of our jurisdictions.
If we can be of any assistance as to your interests in Australia which may be effected by the current crisis, please let us know and we will make every effort to provide constructive advice as the issues you face.