WOMEN UNIVERSITY IN AFRICA
ASSIGNMENT MARK FORM
SECTION 1
PROGRAMME
: Bsc Hon degree in Management, Entreprenueal, Developmental
Studies, Ict, Specialising in Management and Marketing
NAME
: WALTER MURASHIKI
REG NUMBER
: W 200004
LEVEL
: 1.1
SUBJECT
: PRINCIPLES OF ECONOMICS
ASSIGNMENT No. : 1
LECTURER
: DR NYONI
DUE DATE
: 10 MARCH 2020
TITLE OF ASSIGNMENT: Evaluate the impact of the outbreak of corona virus on the
(a) Economy of China
(b) Economy of Zimbabwe
(c) The global trade pattern
SECTION 11
COMMENTS:
GRADEMARK:………. DATE MARKED: /……/……
SIGNATURE:
(a). Corona viruses are a large family of viruses that cause illness ranging from the common
cold to more severe diseases such as Middle East Respiratory Syndrome (MERSCoV) and Severe Acute Respiratory Syndrome (SARS-CoV). Corona viruses are zoonotic,
meaning they are transmitted between animals and people. Common signs of infection
include respiratory symptoms, fever, and cough, shortness of breath and breathing
difficulties.
The spread of the dangerous virus has spooked global markets and threatened prospects of
economic growth. The economy of china suffered a lot because of corona virus outbreak,
45million Chinese in Wuhan are cut off (quarantined and isolated) from the world in order to
curb the spread of the virus. The Chinese people are now confined in their respected homes
for the fear of corona virus-they no longer have freedom to their social life. The Chinese
nation also diverted the use of their already budgeted resources towards the corona virus
pandemic.
Gross Domestic Product of China
According to Ayittey (2020) in recent years, its monetary development has been recorded to
have surpassed China's national growth, with a GDP growth of 7.8% in 2019 as against the
national average of 6.1%. After the spreading of the recent viral disease, numerous firms have
now evacuated their expat workers from the city and temporarily halted business activities.
The current situation had brought all businesses to stand still-all retail shops are closed. The
hundreds of Mac Donald shops which specialise in selling fast foods were all closed .The
business in China normally boost during national holiday. It was greatly affected when they
cancelled the New Year’s Eve events. There is great possibility of a sharp decline of the GDP
of China because of non production.
Travelled restrictions and tourism
The strict travel restrictions that have been enforced in Wuhan and different urban
communities in Hubei are expected to have ripple effects throughout China and beyond, as far
as trade is concerned. Among the industries that would be negatively impacted, retail,
tourism, and hospitality sectors are likely to be most affected. The popular tourist attraction
such as Beijing‘s imperial Palace, Shanghai’Disneyland, Hong Kong Disneyland and Ocean
Park all are closed. The government of China imposed travel restrictions and quarantines to
the affected millions of people and these definitely left Chinese factories short of labour and
under production. In Wuhan the environment is now favourable to the rich than poor. The
rich people are still going shopping as they afford to put on the masks and other protective
measures. The only sector which is operating is the health sector but not on its full capacity.
Supply Chain
All the factories which were supplying to the international market totally shut down .Big tech
companies such as Apple are facing supply issues and delaying launch of their new products
for example Foxconn This actually reflect that Chinese government is suffering from severe
declines in production and also squeezing multinational companies in several sectors which
rely on China, which are aviation, education, .entertainment, hospitality to mention just a
few. The disruption of supply chains triggered sales warnings across technology, automotive,
consumer goods, pharmaceutical and other industries. The prices of commodities have also
declined because of the fall in China’s consumption of raw materials
Hutt (2020) asserted that, in this scenario China is trying its best to keep the business
confidence. The peoples ‘Bank of China is recently cutting the interest rates and planning to
put huge amount of cash into the economy. In recent few years China tried its best to keep the
debt under control, analysts said that the effort might be abandoned and China might be
forced to pump money directly into the economy. Oxford Economics has warned that corona
virus could knock down out one trillion dollars if it become a pandemic.
(b) Zimbabwe began its "Look East Policy" in 2004 following fallout with the West, many
Zimbabweans travel to China to buy cheap goods such as mobile phones and accessories,
clothing and other essential goods for resale in Zimbabwe .But travel restrictions imposed by
Chinese authorities after the virus outbreak are blocking small entrepreneurs from Zimbabwe
to import goods .Most of the goods (clothing and accessories) were affordable as compared
with Indian products .This greatly affected their social and economic life for entrepreneurs
and customers.
Scholarships
Most of the Zimbabweans were benefiting for the Zimbabwe –China scholarship programmes
According to Mapaure (2014) The Phandulwazi nge China scholarship targets citizens of
African states from academia or the broader civil society with a proven research interest in
China-Africa relations. The programme particularly addresses African scholars who are
preparing for a stay in China or are returning from a longer stay in China. With the
scholarship, African citizens are supported to continue working on China and China-Africa
relations and to deepen their analytical work at Centre of Chinese Study in China.The
Zimbabweans are no longer being issued with academic visas and they are not allowed to
travel or participate (imposition of the embargo).
Medical assistance
Zimbabwe gets most of their medical assistance from China through the supply of medical
personnel and drugs. The medical team promote not only the health of Zimbabweans
population but also China –Zimbabweans relations (Chun 2014). December 2012,a group of
Chinese medical personnel under the auspices of the Chinese Zimbabwe Medical Team
provided free medical treatment for Zimbabwe living around Bindura,the capital of
Mashonaland Central province.The Zimbabweans were also benefiting on herbal health
products such as Tiens products (herbal) .The current situation left the suppliers with
nowhere to get the replenishments of their stocks. The Zimbabweans high profiled personnel
regularly seek medical treatment from China, especially after it became difficult for them to
seek treatment in Western Europe .The corona virus out break made them to be holed in the
mother country without an alternative.
Infrastructure development
Since independence, Chinese construction companies have been very actively in Zimbabwe’s
infrastructure sector, starting with the successful construction of the National Sports Stadium
in the mid -1980s (Chun 2014).The Chinese construction company just finished the National
Defence College but working on the Parliament of Zimbabwe project in Mount
Hampden.The are different artisans who come at regular intervals from China to perform
their duties and return back to China. The current corona virus affected the progress of
construction as other artisans are still locked in China.
International Trade
The bilateral trade between China and Zimbabwe has been characterised by the export of raw
materials in return for manufactured goods (including clothing, textiles and footwear),
vehicles (cars, buses, tractors and aircraft), electrical machinery and other equipment.
However, in contrast with many other countries’ trade profiles with China, its two-way trade
pattern with Zimbabwe. This trend is an indication that Zimbabwe secured a market in China
for its resources after the withdrawal of the West. Exports from Zimbabwe to China have
been dominated by cash crops (tobacco, cotton) and minerals. Currently with the corona virus
pandemic, the trade between two countries is suspended. The diamond being mined at
Chiadzwa diamond in Mutare are cut and polished at a plant built close to Zimbabwean
embassy in Beinjing.Travel restrictions is delaying the process and also the sales (foreign
currency) of the product.
Transportation
China has been involved in all aspects of public transportation in Zimbabwe: road, rail and
air. In the area of road transportation, Zimbabwe has acquired commuter buses for the staterun Zimbabwe United Passenger Company. In the area of rail transportation, a co-operation
agreement was signed in November 2004 between the National Railways of Zimbabwe and
China Northern Locomotive and Railing Stock Industries (Abiodun 2014).
Air Zimbabwe has also benefitted from Chinese generosity through the gift of an MA60
aircraft that the airline has been using on local and regional routes. The air line route linking
Zimbabwe and China is currently suspended. The commuter buses are parked at Khami
garage in Bulawayo and Willow vale Harare because of spare shortages. This had greatly
affected the Zupco as the government end up sub contracting commuters which are un road
worth in order to cover up on those parked because of spare challenges.
Agriculture sector
Zimbabwe agricultural sector benefit much from China relations. The outbreak affected the
Zimbabwean economy in the agricultural sector-that is where Zimbabwe get its machinery,
machinery spares, funding as well as agricultural chemicals. The Exim Bank of China made a
donation of agriculture equipment and also training of the key staff in the Zimbabwe’s
agricultural sector (Mukwezera,2013). Mukwezera also cited that China Exim Bank extended
a further loan worth US$ 340 million in 2011 to be used to purchase tractors and supporting
of the mechanization program. The loan is reported to be paid in five years using agricultural
products at a lower, but no less significant level, the consignment of agricultural machinery
was offered by the Sichuan Provincial Government of China, and composed of farm trucks,
tractors and water pumps (Mukwezera 2013). Some of the Chinese companies practice
contract farming with the locals especially on cash crops. Cash crops agricultural chemicals
are also from China
In this modern world all the economies of the world are closely integrated. That is if anything
happens in any part of the world it would have medium to high level of impact throughout the
world. So effect on one of the biggest economies like China would significantly impact all
the economies of the world.
(c)Tourism across the world has been affected gravely due to the outbreak, as China is
recognized by the United Nation Tourism Organization (UNWTO) as a true leader in global
tourism, both as a source market and as a leading destination. The Chinese international and
domestic tours are being cancelled; this greatly affected the tourism revenue for Japan and
Thailand. All the small countries linked to China do not have the cushions to withstand the
adverse economic climate and sudden financial loss could lead to unexpected recession
especially Hong Kong. Their stocks had fallen with 5% since the start of corona virus.
Demand of Chinese products
Most countries have fear of importing goods from the source of this corona virus pandemic,
this is also causing lower than normal demand for goods from China which certainly could
affect the international shipping market as a whole .Several countries disconnected
themselves from China, airlines suspended flights to China e.g. air Lufthansa and its
subsidiaries .This definitely affected the movement of goods and services between the
countries. China is the world’s biggest oil importer .China’s largest oil refinery cut
production by more than 600 000 barrels per day due to shrinking fuel demand.
According to Wrede (2020) the German car makers of VW and BMW announced that they
will temporarily close all their plants in China until the situation normalise. This is a clear
indication of the collapse of the economy .Europe and United States has also big investments
in China, they announced that in few weeks to come all their factories will be temporarily
closed. The South Korean company (Hyundai) announced to close all its car factories because
it had challenges in obtaining cable harnesses made in China. . A prominent car maker Jagura
Land Rover commented that they would be run out of Car parts for their factories if Corona
Virus prevails for another few weeks. Fiat Chrysler said on Friday it had halted production at
a plant in Serbia because of a shortage of Chinese-made parts. The crisis has the potential to
be devastating to an already battered industrial sector.
REFERENCES:
Mapaure C (2014) Chinese investment in Zimbabwe and Namibia: a comparative legal
analysis pg 6
Wrede I (2020) how will the corona virus affect the world economy.
Chun Z (2014) global power and African Programme: China and Zimbabwe Relations: A
model of Africa Relations: Occasional paper 205 pg 14 -19.
Abiodun A (2014) the context and contents of a complex of a relationship. Global power and
African programmes: Occasional paper 202 pg 11-12.
HUTT, R.( 2020) The economic effects of the COVID-19 corona virus around the world. The
World Economic Forum.
Ayittey K (2020) Journal of medical virology: Economic impact of Wuhan on
2019-nCov on China and the world.
Mukwereza, L. (2013). Reviving Zimbabwe’s Agriculture: The Role of China and
Brazil. IDS Bulletin