How did Covid-19 influence the global market Business Essay

Covid-19 Influence to Global Markets
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Covid-19 influence to global markets
The influences of Covid-19 on global societies and economies are undoubtedly more substantial than any other pandemics in the past decades. Coronavirus has spread at alarming rates, infecting millions of people while bringing economic activities to a halt as nations enforce tight restrictions to minimize the spread of the disease. In reality, the restrictions have led to global market failure described by high demands and limited supply, currency volatility, and crashed supply chains (World Bank, 2020). Presently, suppliers are struggling to meet the demand for products and services, while shortages of raw materials have increased the costs of goods and services. The delivery time for cargo has doubled, needless to mention the high political pressure in many countries (Gruszczynski, 2020). Besides, the unemployment rates and company bankruptcy has also increased dramatically (Organisation for Economic Co-operation and Development, 2020). Therefore, the coronavirus is a global social-economic threat that has disrupted people’s lives and put to risk decades of development progress.
The first case of Covid-19 was first verified in China – December 2019. However, with no time, the virus had spread into significant parts of the world, infecting many people while killing a large number. As a countermeasure, many governments imposed lockdowns and travel restrictions to reduce the spread. For example, in the United States, incoming and outgoing flights were suspended, particularly those coming from countries with covid-19 cases (Lingo, 2020). As a result, the production of non-essential goods and services in these countries was halted – leading to reduced working hours and job losses. For instance, over 30 million people filed for unemployment six weeks after the first case was reported in the United States (Lingo, 2020). World Bank projects that many organizations risk going bankrupt unless they received government assistance. Currently, secure brands in the United States, such as Hertz, JCPenney, Neiman Marcus, Rubie’s Costume Company, and J.Crew, to mention a few have already filed for chapter 11 bankruptcy.
Besides the negative impacts of human life, the virus has hit hard the global value chain hub, including the United States, Europe, and China. Over the past forty years, global manufacturing and production have been organized in these countries (World Bank, 2020). Usually, raw materials and work in progress are transported from different countries and assembled in other places. Subsequently, the finished products are shipped to final consumers in both emerging and industrialized countries. China is considered to be at the heart of the global value chain. It ranks as the primary producer and consumer marketplace of many global commodities, including the high value, and industrial products (Organisation for Economic Co-operation and Development, 2020). In reality, China is the major producer of intermediate products, processing and assembly operations. For instance, world-leading electronic brands such as Apple, Sony, and Intel have their assembly plants in mainland China. Likewise, the United St...