• Written by John L Hopkins, Theme Leader (Future Urban Mobility), Smart Cities Research Institute, Swinburne University of Technology

There are now more than 45,000 confirmed cases of the coronavirus dubbed COVID-19 by the World Health Organization, and the disease has caused at least 1,115 deaths. The impact of the virus is now reaching way beyond public health: China is at the heart of global manufacturing, and as supply chains suffer, panic is beginning to set in.

In many provinces across China the government has urged hundreds of millions of workers to stay home to help reduce the spread of the virus. As a result, many factories have stayed closed since the Lunar New Year holiday in late January, halting the production of products and parts destined for countries around the world, including Australia.

Apple is one of the most high-profile companies affected, with its manufacturing partner Foxconn hitting a lengthy production delay, but they are far from alone.

Global supply chains, global problems

The sectors hit hardest appear to be high-tech electronics, pharmaceuticals and the automotive industry.

Globalised supply chains and just-in-time manufacturing mean many seemingly unrelated products are vulnerable to pauses in the flow of goods from China.

It only takes one small missing part to bring entire supply chains to a standstill. If a tyre manufacturer in the United States doesn’t receive valves from a supplier in China, a car plant in Germany won’t receive any tyres, and therefore can’t ship finished cars to its customers.

Something similar happened to automotive giant Hyundai, which had to suspend all operations at its manufacturing plant in South Korea due to a lack of parts from China.


Read more: We depend so much more on Chinese travellers now. That makes the impact of this coronavirus novel


Even tech companies such as Samsung, Google and Sony, which have moved their factories out of China in recent years, are being affected. They still rely on China for many components such as sensors or smartphone screens.

It is not just large businesses that will feel these effects. Many small businesses around the world also source products and parts from China.

The supply of these is now uncertain, with no sign yet as to when normal service may resume. For products and parts that are still being manufactured in China, new enhanced screening measures at all Chinese border crossings are likely to cause further delays.

How will Australia be affected?

The effects of the coronavirus are also being felt in Australia. China is our largest trading partner for both imports and exports. According to the United Nations Comtrade database, Australian imports from China were valued at A$85.9 billion in 2018. The biggest product categories were electronics and electrical equipment, making up A$19.8 billion, and machinery, which accounts for another A$15.7 billion.

Moreover, 90% of all Australia’s merchandise imports are from China, and half of those are engineering products such as office and telecommunications equipment.

Besides the well-publicised impact on airlines, universities and tourism, Australian construction companies are warning clients of upcoming project delays as a result of forecast disruptions in materials sourced from China. Aurizon, Australia’s largest rail operator, has said the coronavirus will delay the arrival of 66 new rail wagons being made in Wuhan, the city at the epicentre of the outbreak.

Expect shortages of high-tech goods

Product shortages could also soon be visible on retailers’ shelves, with electronics stores such as JB Hi-Fi and Harvey Norman expected to experience significant disruption to their supply of computers, televisions and smartphones.

When shortages like this occur, customers will struggle to buy the products they want, when they want them. The only channels available might be third-party resellers offering highly inflated prices. In extreme cases, supply shortages like these can also lead to panic buying and stockpiling.

More uncertainty ahead

It is commonly said that “when China sneezes, the world catches a cold”. So what is the long-term diagnosis for the coronavirus breakout, and what will the economic symptoms be?

As so much is still unknown about COVID-19, with no vaccine or formal means of preventing it spreading having emerged yet, it’s too early to predict what the full impact will be.

For many industries the next few months will bring high levels of uncertainty, with disruptions certain to continue, before recovery programs can start to gain traction.

This is obviously a worry for many organisations, but could also be a period of new opportunity for others, as the world comes to terms with this latest global health crisis. Supply chains that are agile enough to react quicker than their competitors’, or those with more robust risk management plans, might find themselves gaining greater market share as a result of this crisis.

John L Hopkins does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

Authors: John L Hopkins, Theme Leader (Future Urban Mobility), Smart Cities Research Institute, Swinburne University of Technology

Read more https://theconversation.com/high-tech-shortages-loom-as-coronavirus-shutdowns-hit-manufacturers-131646

How Much Does Epoxy Flooring Cost?

Epoxy can be used on wood, cement, concrete, or metal surfaces or as an undercoat beneath other floorings. Discover how much does epoxy flooring cost here. Are you ready to apply epoxy flooring t...

News Company - avatar News Company

An Android Treasure Trove: 10 Youtube Tips and Tricks For Watching Videos On Android Tablets

Your app is the ideal device for you to watch videos on. But did you know about these hidden Youtube tips and tricks to make your Youtube experience better? YouTube remains the king of the hill s...

News Company - avatar News Company

What Are the Highest-Paying Online Casino Games?

If you try to picture instances of big-money wins at a casino, you will likely conjure up images of some James Bond-like figure playing high-stakes poker or roulette in a swanky setting. That’s un...

News Company - avatar News Company

The burn legacy: why the science on hazard reduction is contested

When it comes to reducing the extent of bushfires, scientists disagree on the best way to do it. Hazard-reduction burning (also known as “prescribed burning” or “controlled burning&r...

Kevin Tolhurst, Hon. Assoc. Prof., Fire Ecology and Management, University of Melbourne - avatar Kevin Tolhurst, Hon. Assoc. Prof., Fire Ecology and Management, University of Melbourne

'I will euthanise myself before I go into aged care': how aged care is failing LGBTI+ people

ShutterstockOlder lesbian, gay, bisexual, transgender and intersex (LGBTI+) people fear discrimination, exclusion and isolation in Australia’s aged care services, we found in our research. Wi...

Andrea Waling, Research fellow, La Trobe University - avatar Andrea Waling, Research fellow, La Trobe University

How vulnerable is Xi Jinping over coronavirus? In today's China, there are few to hold him to account

NOEL CELIS / POOL/ EPABrand “People’s Republic of China” is wobbling, as if the massive picture of Mao Zedong in Tiananmen Square was swaying with an earthquake tremor. But it can o...

Rowan Callick, Industry Fellow, Griffith University - avatar Rowan Callick, Industry Fellow, Griffith University

People love the idea of 20-minute neighbourhoods. So why isn't it top of the agenda?

Nils Versemann/ShutterstockWe were heavily involved in the consultation program for Melbourne’s long-term land-use plan, Plan Melbourne. The idea that resonated most with many participants was ...

John Stanley, Adjunct Professor, Institute of Transport and Logistics Studies, University of Sydney Business School, University of Sydney - avatar John Stanley, Adjunct Professor, Institute of Transport and Logistics Studies, University of Sydney Business School, University of Sydney

Life sentences – what creative writing by prisoners tells us about the inside

from www.shutterstock.comA recent project to encourage South Australian prisoners to write provides insights into how prisoners may benefit from written expression. The project, Life Sentences, gav...

Dr Michael X. Savvas, Senior Lecturer in the Transition Office (PhD in Creative Writing), Flinders University - avatar Dr Michael X. Savvas, Senior Lecturer in the Transition Office (PhD in Creative Writing), Flinders University

I made bushfire maps from satellite data, and found a glaring gap in Australia's preparedness

Image courtesy of Greg Harvie, Author providedOn the night of January 9 2020, my wife and I secured our Kangaroo Island home and anxiously monitored the South Australian Country Fire Service (CFS) we...

Wallace Boone Law, PhD Candidate, University of Adelaide - avatar Wallace Boone Law, PhD Candidate, University of Adelaide

Sick and Tired of Your Dead End Job? Try Teaching!

Tired of the same old grind at the office? Want an opportunity to impact lives both in your community and around the world? Do you love to travel and have new experiences? Teaching English is the perfect job for you! All you need is a willingness to ...

News Company - avatar News Company

The Impact of an Aging Population in Australia

There’s an issue on the horizon that Australia needs to prepare for. The portion of elderly citizens that make up the country’s overall population is increasing, and we might not have the infrastructure in place to support this. Australians h...

News Company - avatar News Company