Miti: Too early to gauge coronavirus’ impact

KUALA LUMPUR: It is too early to estimate the impact of the Wuhan coronavirus on Malaysia’s trade, said Deputy International Trade and Industry Minister Dr Ong Kian Ming, as manufacturing activity in China during the Chinese New Year period is very low.

He said most of the factories in China are closed for a week or more for the festive season.

Using reference to the SARS (Severe Acute Respiratory Syndrome) outbreak, Ong said a slowdown in the Chinese economy can be expected in the first quarter of this year due to the coronavirus.

“Because of the importance of China in the global trade and economic value chain now compared to SARS in 2003, the effect would probably be bigger than 2003,“he told a press conference after announcing Malaysia’s trade performance for 2019 here yesterday.

He said there will be some disruptions in China’s, and global, supply chain as a result of the coronavirus which may prevent manufacturing activities from taking place in China, but exactly what negative effect it will have is not known yet.

“We don’t need to be overly panicky about this. This is something that we’re monitoring closely in the context of our trading partners and the industries that do business with China,” said Ong.

As the situation starts to stabilise with more certainty in the next few weeks, he hopes to see a V-shaped rebound by China and other countries that trade with China.

“Things may go down a bit during February and March in terms of trade and output, but once things get back to normal, we’ll be able to see a rebound in the second quarter,” Ong explained.