Page 42 - 2021 White Paper
P. 42
1 White Paper on the Business Environment in China
More countries are likely to reduce their worldwide. Consequently, many nations also
peacekeeping commitments as their economies expected a rise in unemployment. Countries
contract. Reduced international aid will also with high unemployment until the pandemic
negatively impact countries who are heavily reliant experienced a downturn in their economies, as
on it such as Liberia, Afghanistan, Burundi and unemployment rose in a moment of vulnerability.
South Sudan that are vulnerable and experiencing Countries with low degrees of long- or short-term
conflicts. Most nations would have trouble funding unemployment, by comparison, found absorbing
costly initiatives like in Syria or in Iran, assisting the effects of this pandemic and reassigning their
militias like Hezbollah for neighboring Yemen, workforce afterwards to vital industries easier.
Turkish and Russian assistance. The combined One of the big consequences of the global crisis
decline in finance, transport and businesses has been the demonstration of how the world
contributed to a decrease in global oil prices. relies on China for the supply chain of many
These markets were already adversely affected goods. Japan and India are paying businesses
by an inadequate supply from Russia and Saudi to shift production away from the PRC. Chip
Arabia, which were unable to find consensus on manufacturers, such as Intel, have committed
output restrictions. For the first time in memory, themselves to the construction of more factories
the crude oil price became negative in April 2020. in the United States. China’s failure in production
The market crashed so quickly that purchasers during the pandemic quarantine has shown the
were being paid to clear surplus inventory by the dangers of overreliance on single manufacturing
overstocked suppliers. Thanks to the manner in points. Its Asian neighbors will be the main
which potential contracts are written, the negative beneficiaries of the production shift away from
price was short-lived, and oil prices quickly the PRC, however this process can take years or
returned to positive territory. The extraordinary even decades to happen as it takes time to switch
event nonetheless reflected a worldwide supply chains (Bekmirzaev, Ramifications).
deterioration in demand. This dramatic drop in
oil prices will have an impact on the Middle East The economic impact of Covid-19 on the
political regimes, especially Saudi Arabia, Iraq and industrial sector ultimately depends on how the
Iran, and may contribute to the collapse of the crisis affects manufacturing firms. The extent
US shale oil industry unless oil prices rebound of firms’ productive capacities, their degree of
to their previous levels. The national security integration in domestic and global production
and humanitarian crisis in Venezuela have been networks and the type of market they serve are
aggravated by the pandemic and poor oil markets. important factors that determine the extent of
This has also contributed to the adoption of strict the pandemic’s impact on firms. Accordingly,
border controls in Colombia, Brazil and other some firms (and countries) are better suited
countries with regard to Venezuela which has to quickly respond and adapt their operations,
resulted in additional difficulties for Venezuelans. thus reducing the shock’s overall effect on their
Central banks, in an attempt to alleviate the profits, cash flow and staff. To gain a better
economic effects of this pandemic, cut down understanding of the pandemic’s socioeconomic
funding to the banking sector in hopes of reducing impact on developing countries, UNIDO conducted
the debt repayment costs for businesses and a survey of manufacturing firms in nine emerging
families. Nevertheless, relatively low levels of economies in Asia. The survey was conducted
interest until Covid-19 would ensure that cuts in online between April and July 2020 in collaboration
levels would not offer global economies enough with governments, business chambers and other
stimulus. Countries like Brazil, Argentina, Pakistan agencies in the participating countries. The results
and Venezuela might not have the ability to obtained promised new insights into the distinct
get a sufficient amount of loans to help their impacts of Covid-19 on countries, industries and
economies rebound which may result in more firms, as well as into the main responses adopted
unrest, instability and violence. The pandemic has by governments and firms. On average, over half
caused chaos on labor markets. As a consequence of the firms surveyed predict a significant fall in
of business sector shutdowns and social isolation, profits, and one in five expects massive job cuts.
unemployment levels have grown dramatically Firms in Indonesia, Mongolia, Bangladesh and
42
More countries are likely to reduce their worldwide. Consequently, many nations also
peacekeeping commitments as their economies expected a rise in unemployment. Countries
contract. Reduced international aid will also with high unemployment until the pandemic
negatively impact countries who are heavily reliant experienced a downturn in their economies, as
on it such as Liberia, Afghanistan, Burundi and unemployment rose in a moment of vulnerability.
South Sudan that are vulnerable and experiencing Countries with low degrees of long- or short-term
conflicts. Most nations would have trouble funding unemployment, by comparison, found absorbing
costly initiatives like in Syria or in Iran, assisting the effects of this pandemic and reassigning their
militias like Hezbollah for neighboring Yemen, workforce afterwards to vital industries easier.
Turkish and Russian assistance. The combined One of the big consequences of the global crisis
decline in finance, transport and businesses has been the demonstration of how the world
contributed to a decrease in global oil prices. relies on China for the supply chain of many
These markets were already adversely affected goods. Japan and India are paying businesses
by an inadequate supply from Russia and Saudi to shift production away from the PRC. Chip
Arabia, which were unable to find consensus on manufacturers, such as Intel, have committed
output restrictions. For the first time in memory, themselves to the construction of more factories
the crude oil price became negative in April 2020. in the United States. China’s failure in production
The market crashed so quickly that purchasers during the pandemic quarantine has shown the
were being paid to clear surplus inventory by the dangers of overreliance on single manufacturing
overstocked suppliers. Thanks to the manner in points. Its Asian neighbors will be the main
which potential contracts are written, the negative beneficiaries of the production shift away from
price was short-lived, and oil prices quickly the PRC, however this process can take years or
returned to positive territory. The extraordinary even decades to happen as it takes time to switch
event nonetheless reflected a worldwide supply chains (Bekmirzaev, Ramifications).
deterioration in demand. This dramatic drop in
oil prices will have an impact on the Middle East The economic impact of Covid-19 on the
political regimes, especially Saudi Arabia, Iraq and industrial sector ultimately depends on how the
Iran, and may contribute to the collapse of the crisis affects manufacturing firms. The extent
US shale oil industry unless oil prices rebound of firms’ productive capacities, their degree of
to their previous levels. The national security integration in domestic and global production
and humanitarian crisis in Venezuela have been networks and the type of market they serve are
aggravated by the pandemic and poor oil markets. important factors that determine the extent of
This has also contributed to the adoption of strict the pandemic’s impact on firms. Accordingly,
border controls in Colombia, Brazil and other some firms (and countries) are better suited
countries with regard to Venezuela which has to quickly respond and adapt their operations,
resulted in additional difficulties for Venezuelans. thus reducing the shock’s overall effect on their
Central banks, in an attempt to alleviate the profits, cash flow and staff. To gain a better
economic effects of this pandemic, cut down understanding of the pandemic’s socioeconomic
funding to the banking sector in hopes of reducing impact on developing countries, UNIDO conducted
the debt repayment costs for businesses and a survey of manufacturing firms in nine emerging
families. Nevertheless, relatively low levels of economies in Asia. The survey was conducted
interest until Covid-19 would ensure that cuts in online between April and July 2020 in collaboration
levels would not offer global economies enough with governments, business chambers and other
stimulus. Countries like Brazil, Argentina, Pakistan agencies in the participating countries. The results
and Venezuela might not have the ability to obtained promised new insights into the distinct
get a sufficient amount of loans to help their impacts of Covid-19 on countries, industries and
economies rebound which may result in more firms, as well as into the main responses adopted
unrest, instability and violence. The pandemic has by governments and firms. On average, over half
caused chaos on labor markets. As a consequence of the firms surveyed predict a significant fall in
of business sector shutdowns and social isolation, profits, and one in five expects massive job cuts.
unemployment levels have grown dramatically Firms in Indonesia, Mongolia, Bangladesh and
42
