The Coronavirus Outbreak, Global Events and your Business

Covid-19, or the “Coronavirus”, has become a challenging public health emergency in China (and globally, with the WHO declaring the outbreak as a Public Health Emergency of International Concern). It poses a severe risk to human life and has resulted in the Chinese government implementing strict and sweeping quarantine restrictions in an attempt to control the outbreak. These restrictions have grounded flights, suspended the movement of freight, temporarily closed factories and continues to restrict the movement of people in and around the Wuhan and Hubei province of Central China (approximately 60m people). This has effectively shut down vast swathes of a significant industrial hub, and China’s economy in the process. Some commentators have even referred to the incident as “China’s Chernobyl”.

The impact on the global economy of China’s radical attempts to contain this outbreak, and the associated shutdown of part of the Chinese economy, is starting to become apparent and have far-reaching consequences.

This impact is certainly being felt in multi-national, globalized Ireland, the Kerry Group warning that its revenue in China was likely to be down 30% in the first three months of this year due to the Coronavirus outbreak, and the Irish Exporters’ Association calling for
government support to be put in place for Irish business suffering because of the outbreak. Across the Irish sea, Jaguar Land Rover has been reported as having to resort to flying parts in suitcases from China to its UK factories, as those factories face the potential of
running out of parts within three weeks, JCB has cut production because of a shortage of components from China, and Apple has warned that Coronavirus disruption would affect the worldwide iPhone supply.

The global economy is more integrated than ever, and Ireland is at the forefront of this hyper globalised international trade. Irish businesses should be asking what they can do to minimise the impact of these global events on their ability to perform under their own
contracts with their customers, and their rights with respect to suppliers.

To read the full publication, please click here.

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Contributing Advisors