GEORGE TOWN, Feb 10 — The 2019 novel coronavirus (2019-nCoV) epidemic will cause disruptions to the global supply chain due to a prolonged shutdown of manufacturing facilities in China’s Hubei province, said InvestPenang’s Datuk Seri Lee Kah Choon.

The special investment adviser to the Penang chief minister said Wuhan, which is the capital city of Hubei, has an estimated 11 million-strong population and a GDP of US$224 billion (RM928.1 billion) with a presence of 230 Fortune Global 500 firms there.

 “Known as ‘Chicago of the East’, it is a transportation, manufacturing, financial and commercial hub rolled into one,” he said when commenting on the impact of the epidemic on Penang as well as Malaysia’s manufacturing sector. 

He pointed out that the 2011 flood in Bangkok and the nuclear power station mishap in Fukushima, Japan had negatively affected the global manufacturing supply chain so the 2019-nCov epidemic will similarly affect the global supply chain. 

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“The effect of this epidemic coupled with the 25 per cent tariff placed on the US$200 billion of Chinese export to the United States may affect Malaysia in terms of our export to China, which is 14 per cent of our total gross export, and imports from China, which make up nearly 21 per cent of our total gross import,” he said. 

He added that the curtailing of travel and manufacturing activities has reduced the demand for oil, causing crude prices to plunge more than 20 per cent to below US$50 per barrel since the onset of the epidemic. 

“Low oil prices will impact Malaysia negatively in terms of revenue receipts,” he said.

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Lee also echoed Penang Chief Minister Chow Kon Yeow’s earlier comments today that the tourism industry in the country is expected to be negatively affected due to travel restrictions for Chinese tourists. 

“Our Visit Malaysia 2020 campaign target of 30 million tourists with RM100 billion in tourist receipts is unlikely to be achieved if this epidemic is prolonged,” he said.

Chow had earlier said that Penang’s tourism industry expected to see a drop of between 30 and 40 per cent due to travel restrictions.

 Lee stressed that these are negative impacts that Malaysia will face if the epidemic is contained within the Hubei province.

“If the situation breaks out from this province, which seems to be the situation currently, the effect will multiply manifold,” he warned.

Amid the negativity, Lee said there is still a silver lining as the demand for healthcare consumables such as gloves, masks and sanitisers has spiked. 

“This is positive to our manufacturers in these healthcare industries,” he said. 

He said this will present local manufacturers with the opportunity to fill the disruptions experienced by the electrical and electronic industry here.