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Coronavirus' economic impact on China

brainteaser Coronavirus covid19
New answer on Mar 19, 2020
4 Answers
2.0 k Views
Anonymous A asked on Mar 01, 2020

What would be a structured way to discuss this question? Thanks for sharing your thoughts.

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Anonymous C replied on Mar 03, 2020
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Anonymous replied on Mar 19, 2020

Hey A,

What we now know from the open sources is that China is experiencing already unforeseen crisis and recession. In Jan-Feb 2020 its domestic consumption has reduced by 20% and its industrial output reduced by 13% comparing to Jan-Feb 2019!

The whole global economy will be hit by the virus this year because similar effects will be experienced by all the countries. Leisure, entertainment and travel sectors (hotels, airlines, restaurants, etc. – which corresponds for approx.. 5% of the global GDP) were hit first, but the whole global value chain is now breaking down.

Consequently, the governments of most countries will start taking massive actions to ease the effects of global recession. The interest rates have been now lowered to 0%, quantitative easing will be introduced again shortly. I even assume that governments will increase national debts and support the companies saving them from the wave of bancruptcies.

In order to quantify the impact of COVID on China (or any other country), I would analyze the following buckets:

  1. Economic impact (economy slow down, forced demand decrease, shortage of supply, lower productivity)
  2. Social impact (increased medical costs, number of fatalities, other social impacts of people being locked for few months)
  3. Long-term impact (global recession, global ties with/to other countries been broken)

I hope it helps – keep safe and stay healthy!



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Content Creator
replied on Mar 02, 2020
McKinsey | Awarded professor at Master in Management @ IE | MBA at MIT |+180 students coached | Integrated FIT Guide aut

This prompt is too wide, complex, unstructured and multi-topic to be asked in an MBB interview. The prompts you can expect are far more structured.

Hope it helps!



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Anonymous B replied on Mar 01, 2020

Interesting - what would be your suggestion?

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