Pakistan makes its way in UN’s 20 most affected economies by Chinese slowdown

March 9, 2020 (MLN): The United Nations has released a detailed report covering the Global trade impact of the Covid-19 epidemic, as well as names of the twenty nations that have been affected the most by it.

The six-page document vehemently starts with an alarming disclaimer given by the Chinese President, stating: “It is unavoidable that the novel coronavirus epidemic will have a considerable impact on the economy and society”.

Going by the contents of the report, the novel strain of coronavirus (COVID-19) has the potential to significantly slow down not only the Chinese economy but also the global economy. China has become the central manufacturing hub of many global business operations. Any disruption of China’s output is expected to have repercussions elsewhere through regional and global value chains.

A reduction in the Chinese supply of intermediate inputs can affect the productive capacity and therefore the exports of any given country depending on how reliant its industries are on Chinese suppliers. For many companies, the limited use of inventories brought by a lean and just-in-time manufacturing process would result in shortages that will impact their production capabilities and overall exports. 

Overall, the most impacted economies will be the European Union (machinery, automotive, and chemicals), the United States (machinery, automotive, and precision instruments), Japan (machinery and automotive), the Republic of Korea (machinery and communication equipment), Taiwan Province of China (communication equipment and office machinery), and Viet Nam (communication equipment).

The graphical illustration shown in the report also considers Pakistan amongst the 20 most-affected economies, with its textiles and apparel sector being the most vulnerable to the ongoing epidemic.

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