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How the coronavirus could wreak havoc on the global supply chain

February 26, 2020 / Vanmala Subramaniam
SHARESHARESHARE

Decades of globalization have created supply chains so deeply interconnected that a shock event like the coronavirus is now harder to control and could have a dramatic ripple effect on global commerce, economists are warning. “We tend to think about the economy as countries selling to countries. But the reality of business today is that companies get their parts from other companies, and sell to consumers or again to other companies, through a network of complex, deeply integrated global supply chains,” said Craig Alexander, chief economist at Deloitte Canada. Key manufacturing regions in China — the world’s second-largest economy and perhaps the most integral player in the global supply chain — have been in shutdown mode for the past month in an attempt to control the spread of coronavirus outside its point of origin in Wuhan, where tens of thousands have been infected and hundreds have died.