Australian business is bracing for a second wave of hits from the coronavirus as countries close the door to Chinese tourists and the Chinese economy slows to a near standstill.
Australian exporters are feeling the effects of the Novel Coronavirus (2019-nCoV) outbreak. Exports to China make up 38% of the Australian export market, and the virus has reduced demand for many good and services. The seafood industry in particular has been left reeling, after China put a ban on live seafood trade
China’s isolation amid the coronavirus outbreak is taking its toll around the world. Uncertainty over the virus has disrupted global trade and supply chains, depressed asset prices and forced multinational businesses to make hard decisions with limited information.
The CEO of the Commonwealth Bank described the virus on Monday as a ‘headwind’ while the chief executive of iron ore miner Fortescue Metals Group said the situation was evolving, and noted it had not affected any physical shipments of iron ore from Australia to China. The chief executive of the Tourism and Transport Forum said the tourism industry would be looking for support from the federal government after being hit with the bushfires and the coronavirus.
Income from overseas students counts as part of our export figures. Around 46% of Chinese students are studying a postgraduate masters by coursework. If classes are too small, universities will have to cancel them. Chinese students contributed A$12 billion to the Australian economy in 2019, so whatever happens from this point, the financial impact will be significant. The cost of the drop in enrolments in semester one may well amount to several billion dollars. Australia has never experienced such a sudden drop in student numbers.
As the epidemic drags on, it will remain to be seen in coming months what the final toll on Australia’s economy will be.
As licensed Customs Brokers and International Freight Forwarders, Alliance Intercontinental can offer you correct advice on all your international shipping and trade transactions. We are based in Brisbane and handle cargo, both import and export, at all major ports and airports around Australia.