quora Coronavirus Outbreak Spreads in China
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Coronavirus Outbreak Spreads in China

China is experiencing an outbreak of the coronavirus. As a result, the U.S. companies operating in China have responded by suspending their operations and instituting travel restrictions.

Starbucks, McDonald’s, and Disney and other U.S. companies have a significant footprint in China.

The coronavirus has now taken lives of at least 82 people in China, and 2900 reported sick worldwide, including Europe and the U.S.

The Center for Disease Control and Prevention (CDC) confirmed a fifth case on Sunday.

US Companies Suspend Operations and Restrict Travel

On Monday, the U.S. health officials said President Trump had offered to help China. They said they were monitoring 110 people across 26 states for the disease. The number includes the five people who contracted the virus in China and traveled back to the U.S.

To control the spread of the virus, the Chinese government has suspended public transportation in Wuhan and at least nine other cities. Wuhan is the epicenter of the outbreak.

The disease is hitting businesses around the world as it continues to spread in China and across borders.

On Monday, the Shanghai municipal government issued a notice ordering companies not to resume work after the Chinese New Year holiday until Feb.3 instead of Jan,31.

Therefore the Shanghai stock exchange will remain closed until Feb 3.

All three major U.S indices dropped by more than 1% in intra-tray trading Monday as investors responded to the outbreak.

Gloria Guevara, the SEO of the World Travel and Tourism Council, said the travel sector faced a substantial risk when public health threats like the coronavirus emerge.

Gloria was the tourism minister for Mexico during the H1N1 outbreak.

She said 90% of the economic cost of the outbreak was not related to the virus rather, to the panic. She also added that it had taken between 10 months and 19 months for tourism and spending in an area to recover and from local outbreaks entirely.

According to Guevara, mismanagement, lack of communication, and panicked responses is the primary cause of such outbreaks.

She referred to the SARS outbreak of 2003 as one example, saying it cost the global economy between $40 billion and $60 billion. It also cost China 2.8 million jobs.

“The management of the crisis is crucial. They need to be proactive and transparent. It is vital to prioritize working closely with the private sector, and we need not to panic,” Guevara said of international health officials.

“They need to contain the spread of the virus, and we fully support that, but simultaneously, we need to take the necessary measurements to protect the sector,” she added.

U.S. Companies suspending operations in China and restricting travel

The U.S. companies have started responding to the situation. Some suspending operations in China, restricting employee travel, and canceling holiday celebrations.

Here are some affected industries:

Entertainment Sector

  • Disney closed the Shanghai Disney Resort and will close its Hong Kong Disneyland Park for a while.
  • Carnival Cruises has suspended nine cruises scheduled between Jan 25 and Feb 4.
  • MGM Resorts scaled back a Chinese New Year celebrations at its Macao resort last weekend.
  • Royal Caribbean suspended two scheduled voyages on Jan 27 and Jan 31 for its only ship home-ported in China.

Auto Industry

  • Fiat Chrysler restricted travel to Wuhan and 10 other Chinese cities.
  • GM placed a temporary restriction on travel to Wuhan. GM has a manufacturing base jointly with China’s SAIC Motor.
  • Ford Motor suspended all business travel to Wuhan.

Retail Sector

  • Wallmart has more than 400 retail locations in China, is yet to respond to the outbreak.
  • McDonald’s suspended its operations in Wuhan and surrounding cities. The company will also monitor its employee health throughout China.
  • Starbucks closed all shops and suspended delivery of services in Hubei province in China – where Wuhan is located.

Travel

  • Delta Airlines will allow travelers with flights booked to and from China through Beijing and Shanghai until Jan 31 to change their itineraries without paying a change fee.
  • Airbnb is offering a free cancellation on booking reservations in Wuhan from Jan 21 until Jan 31. They will also provide cancellations for any guest suspected of having the virus at the airport, port, or train station.
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