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COVID-19, the virus pandemic that started in Wuhan, China, in November 2019, became a global health crisis in a matter of weeks. Almost immediately after the virus began to gain prominence, measures were taken to curb the spread of the virus that ended up affecting the lives of millions of Chinese. Masses of people were placed under quarantine. Those who were able to, were encouraged to work from home, while the millions that weren’t - factory workers, for example - found themselves out of work as their places of employment were temporarily shut down.
Needless to say, it didn’t take long before the effects of COVID-19 began to impact China's financial situation, causing historic changes for the world’s second largest economy. January and February 2020 were two of the worst months, as industrial production plummeted 13.5% (the historical worst) and retail sales fell 20.5% against the previous year. That, of course, included factories for some of the world’s biggest tech companies, like Apple and Tesla. Also at this time, the virus began to spread across international borders to Europe and the United States, causing both major cities and financial markets around the world to come to a screeching halt as they faced up to the prospect of an unprecedented situation.
In the following iFOREX news article, we’ll lay out the effects the COVID-19 pandemic has had on the Chinese economy, from the performance of stocks to its overall impact on the financial markets and what we might expect next.
The good news is that if China’s manufacturing industry can get up and running normally, that might help to restore broken supply chains that connect it to the rest of the world and start stimulating economic growth. However, with the pandemic still to peak in places like Europe and the US - two of China’s top trading partners - there’s no telling what demand on their side might look like.And that’s where many economists and financial analysts around the world find themselves, waiting and watching because even though the markets are unpredictable on a regular trading day, they're even more volatile in the midst of a global pandemic. All investors and those who are financially-minded can do is stay up-to-date by getting the latest news from sites like iFOREX, where you’ll find more informative articles like this one. At iFOREX, you'll gain a deeper insight into the market with access to a variety of trading tools, , economic calendars and market signals. Joining iFOREX also gives you the opportunity to receive free educational materials, as well as 1-on-1 training with a live coach, who can help explain the various ways to spot opportunities in today’s exceptionally volatile financial markets.
The materials contained on this document should not in any way be construed, either explicitly or implicitly, directly or indirectly, as investment advice, recommendation or suggestion of an investment strategy with respect to a financial instrument, in any manner whatsoever. Any indication of past performance or simulated past performance included in this document is not a reliable indicator of future results. For the full disclaimer click here.