Fitch Report: China and the global economy face downward risks

The new coronal virus epidemic has increased, causing downside risks to China and the global economy.

FITCH SOLUTIONS, an information service company of the International Credit Institution Fitch, issued a report on Tuesday that the progress of the epidemic has brought downward risks to the 5.9 % economic growth forecast of China's economy. As China accounted for the global economy, it was higher than that of the crisis of Shats.At that time, even if the epidemic is mainly controlled in China, it has a greater impact on the global economy.

The report pointed out that the new crown virus is likely to impact the service industry, and the service industry is the main driving force for China's economic growth.However, compared with the epidemic situation during the outbreak of Shats in 2003, this time the authorities' travel restrictions are more stringent. For example, Wuhan has completely blocked the transportation services of entering and leaving the city, and the public's awareness of the epidemic has improved.

The report pointed out that the Chinese New Year's travel period is often 40 days, which has greatly increased the risk of rapid transmission of diseases in the short term.At the peak of the crisis in 2003, more than 5,000 people in China were infected. The cases increased rapidly between March and May of that year. By July, the number of patients gradually declined.

The decline in tourism is expected to be larger

The report pointed out that although the Chinese government is better when dealing with the new crown virus than Shats, the economy still faces downward risk, especially the virus vaccine takes several months to be released, impacting the number of business and leisure visits.Therefore, the service industry will be negatively affected and further impact China's economic growth.

In 2003, the number of people in China fell by 6.4 %, and tourism revenue decreased by 14.6 %. The domestic tourism industry was also impacted.FITCH SOLUTIONS believes that due to the stricter control, the tourism decline is expected to be greater.

The report also pointed out that last year China accounted for 16.5 % of GDP (GDP), while only 4.6 % in 2002 and 2003, which means that even if the epidemic occurs mainly in China, this is still likely to cause the global economy.More impact.