The coronavirus outbreak in China has disrupted global supply chains and slammed the brakes on many industries ranging from retail and tourism to shipping, and Australia, which sends more than 30 percent of its exports to China, is not immune to its negative impact, said a senior Australian official.
“We anticipate such sectors as education services, tourism and agriculture to be hardest hit by the virus,” Nick Coyle, CEO and executive director of the China-Australia Chamber of Commerce (AustCham China), told the Global Times in a recent exclusive interview.
A vast majority of Australian businesses operating in China (about 90 percent) have reported the virus has had a negative effect on their operations, with one-third of the businesses expecting a 20 percent decrease in revenues for 2020, Coyle said.
The high levels of uncertainty caused by COVID-19 have significantly impeded organizations’ capacity to make decisions, strict quarantine measures have affected supply chains, and there is a general dip in demand for a wide range of Australian products and services, he noted.
The AustCham China has circulated a survey among the China-Australia business community and will publish a report with the findings in the near future.
“Preliminary results indicate that around one-quarter of offices in China have remained operational, while one-third are still unsure when they will be able to return to normalcy,” Coyle said.
China is Australia’s largest trading partner. Such items as iron ore and coal, as well as education services, are what China mostly buys from Australia.
Australian resources giant BHP said in a statement last week that “if the impact of COVID-19 lingers, and construction and manufacturing [in China] will not be able to return to regular operation in April, then we expect to revise our annual forecast lower.”
In the education sector, AustCham China said it strongly advocates that the blanket ban be lifted for Chinese students and they be allowed to return to Australia.
“Quarantine measures have restricted to movement of students and tourists, having a significant impact on the education and tourism industries, respectively,” said Coyle.
The Australian government last week extended its ban on international arrivals who have travelled through China for a fourth week due to the coronavirus. The ban has been in force since February 1 and was initially scheduled for 14 days.
The ban has hit Australia’s higher education sector particularly hard since it could strand an estimated 65,800 international visa-holding students in China, The Guardian reported.
Chinese students spend A$10 billion ($6.62 billion) annually. Chinese students represent 38.3 percent of all foreign students enrolled in higher education courses and 51 percent in schools, data from the Australian Bureau of Statistics showed.
As the outbreak of the coronavirus has posed obstacles to logistics and shipping, Australian retailers and suppliers are concerned that consumers will soon start experiencing shortages of products ranging from iPhones to batteries, according to a report by The Guardian.
Of the Australian businesses that have reported some supply chain issues, around 80 percent are connected to shipping delays. “It is also important to note than many businesses in Australia rely on intermediate goods from China,” said Coyle.
“Industries reliant on agile supply chains, such as agriculture and fresh product, are finding it more difficult to operate,” Coyle noted, adding that businesses are considering alternative or substitute markets where possible.
To cope with the virus, Coyle said the chamber expected policies that can relieve cost burdens on enterprises.
“We’ve seen a number of measures at local levels being implemented and we would like to see a coordinated approach where measures are available in all cities,” he said.
China has lately rolled out support policies for enterprises to lower operating costs and ease cash shortages amid the epidemic.
The Ministry of Commerce pledged over the weekend greater policy support for foreign trade and foreign-funded firms, especially in key areas and corporate champions that are crucial for global supply chains.
Visitors take a look at beef in the Hunter Beef booth from Australia during the China International Import Expo. Photo: Yang Hui/GT
