Sixteen
years after the SARS virus infected over 8,000 people and killed 77, the
coronavirus is now sparking fears across the globe with no vaccine in sight.
The
coronavirus is likely to have a bigger economic impact than previous outbreaks
thanks to a rapidly growing Chinese economy and its deeper commercial ties to
the U.S. In 2003, when the SARS virus hit, China’s GDP was $1.6 trillion.
Today, China’s GDP sits around $13 trillion.
Over
that period, China has been a growth hub for U.S. companies looking for ways to
boost their bottom lines. Now those companies are on the front lines of a
growing health pandemic that’s infected nearly 10,000 people and killed at
least 213. Some U.S businesses, like gaming giant Las Vegas Sands Corp.
(which is seeing an 80% drop in visitors at its Macau locations amid the
outbreak), had no operations when SARS hit in 2003. Earlier this week, the
billionaire chairman of Las Vegas Sands, Sheldon Adelson, noted that all
employees in the region are wearing masks, and visitors are being screened for
an increased temperature, which could indicate possible infection.
How
much it will cost the casino giant will be clearer in the second quarter.
“I
think it would be foolhardy to think we can reduce costs enough to offset a
continuing 80% decline. That's a real problem for any operator,” president and
COO of Las Vegas Sands, Rob Goldstein, told analysts.
Here’s
a look at China in 2003 and China now:
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China’s
economy is among the fastest -growing in the world. There are worries China’s
growth could take a big hit amid the coronavirus threat.
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China
is exporting more goods than ever before. In 2018, China was the United States’
largest supplier of goods, including electrical machinery ($152 billion),
machinery ($117 billion), furniture and bedding ($35 billion), toys and sports
equipment ($27 billion) and plastics ($19 billion).
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The
number of Chinese billionaires is growing. Jack Ma, who recently resigned as
chairman of Alibaba, the e-commerce giant he cofounded, is the nation’s richest
with a net worth of $42 billion.
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Travel
has become a key indicator of quality of life for China’s rising affluent
population with more and more Chinese traveling overseas for their vacations,
according to Nielsen. Chinese tourists spent an average of $762 per person on
shopping on their most recent overseas trip, while non-Chinese tourists
averaged $486, according to a 2017 Nielsen survey.
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Starbucks
announced it’s closed more than half of its 4,100 stores in mainland China amid
coronavirus fears. It’s not the only retailer closing stores: H&M closed at
least 45 locations and suspended business travel to and from China for its
employees. IKEA shut half of its 30 stores in mainland China. Coca-Cola
plants have also been affected.
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China
is Marriott’s biggest market outside of the U.S. In 2018, the company partnered
with Alibaba. The agreement allows Chinese travelers to book Marriott hotels
through Alibaba’s travel website.
Earlier
this week Marriott said it was waiving cancellation fees for hotel stays
through February 29, 2020, for guests with reservations at hotels in mainland
China, Hong Kong, Macau and Taiwan. The waiver is also available for guests
from mainland China, Hong Kong SAR, Macau and Taiwan traveling outbound to
other Marriott destinations globally.
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Visitors to Las Vegas Sands properties in
Macau are down 80% during a typically busy Lunar New Year season as the
coronavirus hits the region. “The current situation is unique and serious,”
billionaire Sheldon Adelson told analysts this week. “Our top priority is the
health and safety of our employees and guests, and we are doing everything we
can to support the governments both of Macau and China,” the Las Vegas Sands
chairman and CEO added.
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