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Federal Reserve Chairman Warns Coronavirus Outbreak Will Stifle Chinese Economic Growth

© AP Photo / Alex BrandonJerome Powell speaks after President Donald Trump announced him as his nominee for the next chair of the Federal Reserve
Jerome Powell speaks after President Donald Trump announced him as his nominee for the next chair of the Federal Reserve - Sputnik International
The deadly coronavirus, which broke out in the city Wuhan, China, in late December 2019, has caused at least 130 deaths as of 29 January, and has prompted an international response to find a cure for the rapidly spreading disease. Meanwhile, China's economic rise may take a hit, as investors become reluctant to inject funds into the country.

Federal Reserve Chairman Jerome Powell said on Wednesday that the effects of Chinese coronavirus may lead to a disruption in economic growth for the entirety of east Asia, the Hill reports.

"There is likely to be some disruption to activity in China and possibly globally based on the spread of the virus today and the travel restrictions and business closures that have already been imposed," Powell said, speaking to reporters.

Powell did not go into detail about the scale of the market response, saying it is "too early" to make predictions on the damage the disease will cause, but that “there will clearly be implications in the short term for Chinese output" and that regional neighbours will experience the initial repercussions. 

The comments illuminate a growing concern among policymakers about the economic impact of a new coronavirus that has quickly spread throughout China and out into the rest of the world.

Medical establishments at the academic and national level are scrambling to pin down a cure, even as the virus has led to a substantial drop in international travel and an increase in concern over international trade.

Stocks in airlines, resorts and hotels, travel companies, and other major American brands, including Nike and Disney have seen a sharp decline over the crisis.

China has reportedly confirmed at least 6,000 cases of the deadly coronavirus in the country, with a current estimate of 132 fatalities. At least 80 cases have been confirmed outside of China, according to Business Insider.

The rapid spread has led to a quarantine for the entire city of Wuhan, where the virus was first discovered, as well as travel bans within the country and at the borders.

The Chinese government claims to have opened a 1,000-bed coronavirus hospital 48 hours after the construction of the facility was initiated, amid a highly-publicized national response to identify a way to slow the outbreak.

As the US mulls banning all travel to China, flights between the UK and China have been temporarily suspended, and the Democratic People's Republic of Korea has halted tourism entirely.

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