Supply Chains Are Going to Have Massive Disruptions If Outbreak Continues to Build: Strategists
- CNBC Television
Victoria Fernandez, chief market strategist at Crossmark Global Investments, and John Stoltzfus, chief investment strategist at Oppenheimer Asset Management, talk the economic implications of the coronavirus outbreak. The new coronavirus outbreak in China has hit global supply chains hard and spurred sourcing away from the world’s manufacturing hub — a shift that started amid the U.S.-China tariff fight. As business activity and transportation has been restricted in many Chinese cities, companies unable to fulfill contractual obligations are applying for force majeure certificates issued by China’s Council for the Promotion of International Trade. Companies that present such certificates to the counterparties of their deals could — depending on the clauses of their contracts — be absolved from paying penalties for being unable to fulfill agreed upon terms due to circumstances beyond their control. China’s total trade reached 30.51 trillion Chinese yuan ($4.4 trillion) in 2018. Since it announced the availability of these slips at the end of January, the council has issued 1,615 of these certificates in just two weeks, Xinhua state news agency reported, citing data from the council. Those certificates cover a total contract value of 109.9 billion Chinese yuan ($15.8 billion) worth of goods that could be cancelled or for which fulfillment could be deferred, Xinhua reported.
–
read more.
end