Northeast Asian powers of China, Japan, and South Korea face major economic coronavirus problems
Noriko Watanabe and Lee Jay Walker
Modern Tokyo Times
The nations of China, Japan, and South Korea have respective issues related to territorial disputes. Despite this, all three nations are part of an integrated economic chain that accounts collectively for just below 25 percent of the world economy. Hence, the coronavirus (Covid-19) is creating major economic problems for all Northeast Asian nations including Taiwan.
Internationally, over 3,000 people have died from coronavirus with the majority dying in China. Yet, in recent weeks, it is clear that other nations are facing a real crisis. This notably applies to Iran, Italy, Japan, and South Korea and the list of nations will most likely increase until the crisis relents.
Tedros Adhanom Ghebreyesus, the Director-General of the World Health Organization (WHO), reiterated that cases are now jumping outside of China. He stated, “We are in uncharted territory – we have never seen before a respiratory pathogen that is capable of community transmission but at same time which can also be contained with the right measures.”
However, for the economic powerhouse of Northeast Asia, the crisis is especially potent. Thus, with nearly 25 percent of international trade being accounted for by China, Japan, and South Korea respectively, then economic bottlenecks will impact regional nations and the international economy.
The economist Song Xuetao at Tianfeng Securities, uttered, “If the epidemic spreads in Japan and South Korea, it will bring a second blow to the global industrial chain and impact downstream companies in China.”
Now, sadly, South Korea is facing a major coronavirus crisis with over 4,300 cases. Hence, despite cases reducing in China even if the Wuhan epicenter of the crisis remains – the fear is that Japan and South Korea will further lead to an economic downturn.
Turning back to the economic angle of coronavirus, the Carnegie Endowment for International Peace, uttered, “What’s more, even though the projected decline in expected gross domestic product (GDP) growth is lowest for Japan (see figure 6), the impact will be larger in some respects because it is the largest economy in Asia outside of China. That means the nominal GDP value of even a smaller percentage-point economic disruption would still be relatively high. In fact, based on calculations using CEIC data, the expected relative drop in the total value of GDP growth for Japan is expected to be the second highest among China’s neighbors, behind only that of South Korea. From that vantage point, South Korean and Japanese firms will feel the biggest impact.”
Hence, it is essential for China, Japan, and South Korea to work closely together in the area of health, logistics, supply chains, and other essential areas. After all, the health crisis that is triggering economic negativity belongs to all Northeast Asian powers. Thus, all political tensions that existed prior to the coronavirus crisis must firmly be put on a backburner. Similarly, it is imperative that health issues and interconnectivity becomes drastically increased.
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