IMPACT OF THE CORONAVIRUS ON BUSINESS

The coronavirus outbreak ensured that the Year of the Rat didn't get off to the most propitiousstart. Over 2,000 people dead so far, more than 80,000 infected and 40 plus countries affected. Cities in lockdown, travel restrictions in place, plant closures mounting. Global trade, commerce, tourism, investment and supply chains in disarray.

Today, China's economy is much more deeply intertwined with the world's economya 17% share of global GDP with trade accounting for 34% of domestic GDP than it was during the 2003 SARS outbreak. A report by my team in Frost & Sullivan'The Coronavirus Outbreak and ItsImpact on The Global Economy'says that the best case, and also the most likely, scenario is one of Gradual Abatement where cases remain concentrated in China in Q1 2020, before gradually being eliminated from March 2020. In this scenario, the global economy would grow by 3.1% in 2020with China's GDP growth slipping from pre-outbreak forecasts of 5.9% to 5.4%. The report also finds that in the worst-case scenario or what it terms the Severe Pandemic scenario, where the outbreak intensifies and spreads worldwide before being brought under control by June-July, global GDP growth could dip to below 2%.

Apart from applying the brakes on GDP growth, I also foresee the outbreak affecting key macroeconomic indicators like oil prices and interest rates. I believe oil prices will fall as a resultof reduced demand from China, the world's largest importer of oil, and lowered demand for jetfuel due to widespread travel restrictions. I also expect more and deeper cuts to interest rates than in 2019 as countries scramble to shore up their tottering economies. The report also finds that in

the worst-case scenario or what it terms the Severe Pandemic scenario, where the outbreak intensifies and spreads worldwide before being brought under control by June-July, global GDP growth could dip to below 2%.

Two days ago, all employees at our company received a message stating that a business continuity management process would be implemented "to reduce the disruption caused bydisease outbreak to an acceptable level through a combination of preventative and recoverycontrols." And that's exactly what businesses across the world need to be doing. Safeguarding their prospects through smart, pre-emptive strategies, whether it be aligning with likely scale backs in discretionary spending in China or diversifying supply chains to include non-China based suppliers.

As the effects of the coronavirus outbreak continue to spoolout, here's my own bit of Confucianadvice be warned, be prepared and, most importantly, be hopeful.

1. An overview of Covid-19 and the impact on corporate organization. (Hint: it is required to define and explain current issues on corporate organization)