Korea's trade data plunges as COVID-19 hits global supply chain

South Korea's exports to China slumped in the first 20 days of February, which is not only indicating a grim outlook for Asia's fourth-largest economy, it also shows that the epidemic has started to disrupt the region's supply chains.

South Korea's daily average shipments fell 9.3 percent during the first 20 days of February, according to the customs office. Shipments to China, South Korea's biggest trade partner, fell 3.7 percent, and imports from China plunged 19 percent.

Experts noted that the fall in both exports and imports with China shows the supply chain is sputtering, and it probably won't be back on track until the second half of the year, said Lee Hong-bae, professor of international trade at South Korea's Dong-Eui University in an interview with Bloomberg this week.

The data is being seen as a bellwether for world trade as South Korea is the first major exporting economy to release data since the start of the epidemic.

South Korea reported its first death from the virus and a surge in new cases on February 20, and according to most recent data, 156 coronavirus cases have been confirmed in South Korea, with cases already spotted in military and medical workers, spurring concerns about the large-scale spread of the disease outside China.

Here in China, while battling with the virus, the country is also battling with the downward economic pressure by supporting companies and factories to resume work orderly and retain the contagion risk at the lowest risk level.

The move will not only lift China's economy, as the world factory and market, it will also help put the global supply chain up and running again, and boost the global economy.

Among the over 20,000 state-owned manufacturing enterprises, 80 percent already resumed production, and 95 percent of state-owned enterprises in communication, electric grid, transportation, and petroleum and petrochemical industries resumed work.

Private and foreign companies are also starting to resume work in China.

Chinese computer manufacturer Lenovo restarted operations on February 10, all factories, except the ones in epicenter Hubei Province, have resumed work after substantial preparations for epidemic prevention and control.

Tesla's gigafactory in Shanghai and its suppliers also started to gradually resume operation on the same date.

Grappling with the shortage of labor due to employees' reluctance returning to work because of the virus, Foxconn's central China Zhengzhou factory in Henan Province, Apple's largest manufacturing hub in China, started to give out the biggest incentive bonus, 5,250 yuan per worker, for any employee who is willing to return to work or new recruits.

Foxconn's Zhengzhou factory produces over 40 percent of the global iPhone supplies. Apple said on February 17 that it could not reach the income target for the first quarter in 2020, because the suppliers' work-resuming process is slower than expected.

An analyst from Strategy Analytics predicted that Apple's Q1 global shipment could drop by 10 percent compared to the same period last year.