Coronavirus challenge and Pakistan's exports.

Byline: Aadil Nakhoda

KARACHI -- Year 2020 has brought a major challenge in the form of COVID-19, more commonly referred to as the coronavirus disease, which has sent shockwaves to economies around the world.

The virus has killed more than 3,000 people since its outbreak in Dec 2019 and is rapidly spreading across different regions of the world. China has been the most affected. The epicentre of the virus is Hubei province. With a GDP of more than $500 billion, Hubei's economy is nearly as large as that of Thailand, Belgium or Sweden.

According to a recent report published by Bloomberg, Hubei contributed 39.4% of the total phosphorus mining in China, 11.9% of cloth produced in China, 11.6% of fertiliser, 8.9% of cars and 4.9% of cement between January and October 2019.

China exported approximately $2.5 trillion worth of goods in 2018. Although China's exports lost steam in 2019 due to US trade sanctions, 2020 can be worse if the impact of coronavirus is felt as expected.

According to the World Economic Forum, China's growth in the first quarter of 2020 is likely to slow down to 4.5%, while global oil demand is also likely to decrease.

Car manufacturers Nissan and Hyundai are facing significant delays in the procurement of parts and accessories. Foxconn, a major manufacturer of Apple products, is also reporting delays in production.

The pharmaceutical industry is likely to suffer a major setback as Hubei has a significant number of contract manufacturers in the pharmaceutical industry, providing raw material and intermediate goods to producers around the world.

According to the International Trade Centre's Trademap.org, the United States imported more than $472 billion worth of goods from China in 2019. Although the value of imports dropped 16.1% since 2018, China remained by far the largest source of imports into the US.

Mexico, Canada and Japan ranked as the next three largest source countries. The value of imports from each of the three countries showed lower variation between 2018 and 2019. In essence, Trump administration's restrictions on imports from China took a significant toll in 2019.

Approximately, 45% of goods imported into the US from China belonged to the broader category of electrical machinery and equipment, machinery, mechanical appliances, nuclear reactors and boilers. More than 36% of the electrical machinery imported into the US is sourced from China.

Furthermore, the US imported more than $35 billion worth of clothing...