Mexican exports dropped US$1.36 billion in February due to disturbances in the  supply of inputs and components imported from China, according to the United Nations Conference on Trade and Development (UNCTAD).

While the global economy impact caused by the COVID-19 (coronavirus) outbreak is still being assessed by analysts, the UN body announced a global US$50 billion fall in manufacturing exports in February alone.

“China's two percent industrial production contraction in February had a domino effect on the world economy,” the organization reported. Disruption to the Chinese exports to Mexico saw  automotive equipment and electrical machinery particularly effected.

In the last two decades, China has become the largest exporter and the main driver of global manufacturing, establishing itself as a key supplier of goods and components for all kind of products.

UNCTAD’s report states that the European Union exports were impacted the most with US$15.59 billion lost, followed by the US and Japan with US$5.77 billion and US$5.18 billion respectively.

The most affected sectors include precision instruments, machinery, automotive and communication equipment. The European Union, US, Japan and the Republic of Korea are expected to experience a bigger impact, given their relevance in those sectors.

Although there is still uncertainty about the full impact of coronavirus on China's productive capacity, economic slowdown is inevitable and knock-on effects to global value chains will be seen in the coming months, according to UNCTAD.

For developing economies that are reliant on selling raw materials, the effects could be felt “very, very intensely,” said Pamela Coke-Hamilton, who heads UNCTAD’s Division on International Trade and Commodities. “Assuming that it is not mitigated in the short-term, it’s likely that the overall impact on the global economy is going to be significant in terms of a negative downturn.”

 

Impact in Sonora

The Sonoran manufacturing sector is already witnessing lower flow of materials from China, according to a Reforma report. In recent weeks auto parts, aerospace and healthcare equipment production lines were stopped in the northern state, Gerardo Vázquez Head of the manufacturing association Index Sonora warned.

Alicia Girón, Coordinator of the University Program of Studies on Asia and Africa, estimated that the global alert implies an economic impact for Mexico due to its high commercial dependence, especially to China.

So far, Bimbo and the auto parts company Nemak, have closed some of its units in China.

 

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Global Exports Down

Economies Hit by Chinese Slowdown.

Figures in billions of USD

European Union	15.59
US	5.77
Japan	5.18
South Korea	3.81
Taiwan	2.64
Vietnam	2.29
Singapore	2.16
United Kingdom	1.91
Mexico	1.36