*Updated 30 March 2020
Austrade is open for business and our network of 1,100 staff is committed to helping you through this time.
As part of ‘Team Australia’, Austrade is working closely with the network of government departments and industry agencies to help Australian businesses overcome complex and fast-evolving COVID-19–related challenges.
This site provides updates on markets and logistics, and links through to the Government’s extensive business support programs.
Support for businesses impacted by Coronavirus
The Australian Government has launched new support for Australian businesses to address the significant economic impact of the Coronavirus. Find financial assistance, eligibility and timing on business.gov.au
Latest insights from Austrade
27 March 2020
Ports, Aviation. Transport and Logistics
Continuing indicators are that ports, transport and logistics networks are returning to normal operations.
More key rail and road links opened in the previous week with domestic travel restrictions easing around the country.
Shanghai resumed its interprovincial bus lines to surrounding provinces (with the exception of Beijing and Hubei), but has maintained incoming anti epidemic checkpoints from those regions.
Sichuan Province has announced similar re-openings with the exception of Beijing and Hubei. In China’s north-east, Harbin has restored 60 more inter and intra provincial train services, while Liaoning added an extra nine provincial train services. Shenzhen, in Guangdong, removed all road anti-epidemic checkpoints.
Shipping and logistics companies have advised that port operations outside Wuhan are now operating normally including truck transport which is clearing out cargo backlogs.
All transportation including road, flight and rail will resume to and from Wuhan with the ban to be lifted on the 8th April 2020.
Despite ports returning to normal operations, congestion in China caused through February continues to cause issues through the sea freight industry, with a shortage of containers (particularly refrigerated containers) and ships leading to potential delays at the Australian end and increases in sea freight costs.
China’s international aviation routes continue to drop, but domestic aviation is increasing. In the previous week domestic flights increased to 40 percent of normal levels as more workers return to businesses and factories. This is particularly noticeable in the Pearl and Yangtze River Delta regions.
International passenger flights continue to drop (1073 flights scheduled for the week of 23 March, down from 1291 two weeks previously. Scheduled direct passenger flights between China and Australia continued to rise, up to 42 per week (around 25 percent of normal capacity).
Advice received is that scheduled cargo flights into China have increased by around 8 percent over the last two week period, from 870 to 930.
Australia to China weekly cargo flights have increased from 11 to 19 since the COVID 19 outbreak.
Consumer and market dynamics
China’s e-commerce and digital retail platforms continue to experience strong growth with a continuing escalation of the numbers of consumers making purchases online.
Some reports note that online retail sales of physical goods went up by 3 percent in value in January/February 2020 year on year, accounting for 21.5 percent of the total retail sales of consumer goods – this is the highest proportion of total retail sales on record.
Online sales of food (26.4 percent) and consumer goods (7.5 percent) recorded increases.
Live streaming and other marketing and promotional activities promotional activities are critical to sales and brand building and have become even more necessary in the current environment.
For information on how Austrade can assist your business with e-commerce and marketing strategies please contact business.gov.au
Over 1,000 brands hosted a WeChat Mini Program live-streaming on 8 March (International Women’s Day). One Chinese firm, Luolai, a home supply store, sold approximately AUD $2 million in merchandise within 6 hours and recorded 1.4 million views.
According to China’s State Council, over 90 per cent of large agricultural wholesale markets, supermarkets, chain stores, e-commerce platforms, and express delivery businesses have resumed operations nationwide.
Business and government across China are now hoping for a wave of pent-up consumer demand known as 'revenge spending', in order to kick-start economic growth with supply constraints easing.
It is forecast that many businesses in the most affected sectors such as hospitality and tourism will never recover lost earnings and many are not expected to reopen.
The available data indicates a very gradual growth in consumption.
According to China’s Ministry of Commerce daily average sales of key retail businesses grew by 0.5 per cent in the first 10 days of March. This followed 5.6 per cent growth in the last 10 days of February.
Across China policies are being implemented to encourage consumption and ensuring businesses remain open and normalise economic activity. Initiatives to encourage consumption across the cultural, tourism, and catering sectors as well expanding aged and child care and promoting spending on health and well-being. Policies aimed at increasing consumption in some of China’s traditionally less wealthy and less developed regions is also a priority.
One strategy being used by local governments is the issuing of vouchers including e-vouchers which can be used to purchase goods and services including restaurants or entry to tourist sites. Some companies have also issued vouchers for use in their retail stores.
Industry sectors and recovery opportunities
The People’s Bank of China reports that Chinese financial institutions have issued RMB 111.4 billion in low-cost loans since the start of the outbreak. Banks are targeting small and micro businesses, particularly in tourism, entertainment, catering, transport and animal husbandry.
To stabilise unemployment, the Ministry of Human Resources and Social Security has granted RMB 94.2 billion in social insurance subsidies to the SME sector.
Demand for Australia’s food and beverage products including high value items like live seafood is still low with food service and restaurant sectors still deeply affected.
Rabobank has estimated that total dairy import volumes in China will fall by 19 per cent in 2020 due to the onset of COVID-19. The report has based its Chinese estimates on lower demand in retail and food service channels and build up in milk powder stocks as well as further expansion in local milk production through 2020.
In the resources and energy sectors export volumes remain largely unchanged due to COVID-19. According to several industry sources, no Australian cargos have been turned away in North Asia.
The outbreak of COVID-19 has exacerbated strains and will potentially hasten reform in China’s hospital system. Up to 90 percent of surgeries and outpatient services that were not related to COVID-19 in China have been delayed since the end of January. Private hospitals and those in smaller cities will likely absorb a larger proportion of surgeries and other services during the recovery phase, with China’s leading hospitals at full capacity. These trends are likely to drive demand for Australian health services and digital health capability.
With millions of China’s population confined to their homes, games providers such as Shenzhen based Tencent have experienced significant demand and a rise in sales. It is likely that China’s regulatory environment for the approval of games will improve allowing more foreign developed games or joint collaboration to proceed this year.
For more information on sector specific issues we encourage Australian businesses to contact Austrade on 13 28 78.
20 March 2020
On 13 March, the World Health Organization declared Europe the new epicentre of the COVID-19 outbreak. In the last week, all major European governments have announced emergency measures to limit travel, support business, and boost health services. The European Central Bank has launched an emergency package worth €750 billion to ease the impact of the coronavirus pandemic.
- The European Commission – the EU has banned entry by non-EU citizens to the European Union, although implementation will be dependent on member states. In the meantime, many European countries have imposed internal border controls within the Schengen area.
- France – On 17 March, Bruno Le Maire, Ministry of Economy, claimed France is likely to enter into recession with a decrease of 1% of its GDP in 2020. Public debt may also rise above 100% to 3.9% of GDP. Home confinement has been imposed across the country with residents only allowed to leave their home to procure necessities.
- Germany – The German Chancellor, Angela Merkel, announced the country was facing its biggest challenges since the Second World War. Germany has not announced a lockdown but has closed its borders to non-EU citizens, restricted travel, closed all stores except food retailers and pharmacies, and ordered the closure of some public and commercial spaces.
- Italy – With the highest infection count outside China, the country is in stringent lockdown. Italian medical services are struggling to cope with the volume of patients that need intensive care and COVID-19 patients are being treated in field hospitals.
- Spain – National Securities Market Commission (CNMV) temporarily banned short-selling in stocks from the worst-hit listed companies.
- Switzerland – Credit Suisse economists expect Switzerland to fall into a ‘brief’ recession this year. The Credit Suisse specialists expect GDP to fall 0.5% in 2020, compared to their previous estimates of growth of 1.0%.
- UK – With a raft of financial stimulus measures, the UK has announced most schools will close, except for pupils whose parents work in essential services.
Impacts on key sectors
- Germany – Federal and state emergency plans call for the number of intensive care beds in German hospitals to be doubled (currently 28,000 intensive care beds exist in Germany); and larger conference, event halls and hotels are to be converted into hospital wards.
- UK – Best Western has suggested utilising its premises as temporary hospitals. The government wants to dramatically increase domestic manufacture of ventilators, and has appealed to Dyson, JCB, Unipart and Rolls Royce. Additive manufacturing may contribute to successful outcomes.
- France & pan Europe: Ramsay Santé is the largest private pan-European healthcare provider in Europe. It is planning to take additional clinical work to free capacity in other parts of national healthcare systems. The company plans to transform its facilities, where possible, to provide intensive care to the expected surge in COVID-19 patients in two to four weeks.
- Czech Republic – Volkswagen Group will close the Skoda Auto production facility for the next two to three weeks. Toyota-Peugeot-Citroen will suspend production from 25 March.
- France/Spain – Airbus suspended production lines to provide employees with required protections against COVID-19. The company plans to restart its plants on 23rd March.
- France – Manufacturers in several sectors announced the shutdown of their plants, including Renault, PSA, Airbus, Michelin and Hermes. The French industry specialising in luxury clothing is converting parts of its plants to produce masks (mostly by SMEs) and hydro-alcoholic gels.
- Germany – All automotive OEMs (BMW, Daimler and Volkswagen) are closing their European and South African (BMW) manufacturing plants as a safety measure but also due to anticipated low demand. Closures will remain in place for two to three weeks. Technology group Bosch is stopping production at some European locations. Plants in France, Italy and Spain are temporarily suspending or shutting down production.
- Russia – RBC news website reports as of 18 March, Russian prisoners, students and military personnel will produce medical masks and other equipment.
- Sweden – Volvo Group (trucks, buses) warns of ‘significant’ financial impact due to workforce shortages and disruptions to supply chains. Operations at sites in France and Belgium have been halted and one of its Swedish sites will be shut from 23 March for an initial period of two weeks.
- France – Farmers and the agrifood industry are anticipating a shortage of staff, trucks, and plastic and paper wrapping and packaging for daily activities and for some harvests (cereals, fruits, vegetables). The lack of workforce could be provoked by the reluctance of usual recruits from Poland and Romania to travel to France. Substitutes are hard to find as other countries such as Morocco and Tunisia are cut off from the French market because of closed borders.
- France – Hundreds of Amazon workers have gone on strike, calling on the retail giant to temporarily close or make it easier for employees not wishing to work during the outbreak.
- UK – The Co-Operative supermarket is to create 5,000 store-based jobs in a bid to provide temporary employment for hospitality workers who have been laid off due to COVID-19.
Logistics: borders and highways
- Germany – Flixbus, a major operator of intercity and long-distance bus services across Europe, is suspending all national and cross-border connections to and from Germany.
- Czech Republic – There are transport issues at the borders with Poland and Slovakia with queues of tens of kilometres. Poland has opened three new border crossings to try to overcome these traffic blockages.
- Scandinavia – Tourism/travel is heavily reduced. SAS has placed 90% of its staff on extended paid leave. Norwegian Air will cancel 85% of its flights and temporarily lay off 7,300 employees.
- Israel – Initial mass purchasing in supermarkets and increase in online shopping.
- Germany – Demand for at-home deliveries from supermarkets has risen strongly, with services booked out up to one week. Food stockpiling and demand for pasta, rice and canned food continues to increase, despite government assurances that food supply chains are secure.
- Germany – Public transport has been reduced to Sunday timetables due to lower demand and has switched to online/app ticketing only. Getting around has become more difficult.
- Spain –Initial mass purchasing in supermarkets. The government has guaranteed food and personal hygiene supplies. Subdued domestic consumption in the services sector to be expected.
- UK – Increase in grocery shopping continues with restrictions on quantity of products purchased. Online grocery company Ocado has closed its website and app until 21 March due to exceptionally high volumes. Some larger supermarkets are holding ‘elderly-only’ shopping hours. One is expanding staff by 3,500 and its online delivery services.
Webinar: Impact of Coronavirus in Australia and China
Hosted by Australia China Business Council on 20 March, the panel included Daniel Boyer (Austrade General Manager for Greater China) on the business impact on the ground in China, and Jenny West (Austrade General Manager for Trade and Investment) on the impact of the virus on Australian tourism and investment industries.
Watch the webinar
State and Territory support
In addition to the Federal Government, States and Territories also provide support, resources and advice for businesses:
Austrade will assist businesses and our partner agencies with strategies and initiatives aimed at rebuilding business links and restoring confidence as the worst of the disruption eases.
Students studying in Australia
For the latest information visit Study in Australia.
The COVID-19 outbreak has impacted thousands of Australia’s international students, and our institutions and regulators have moved swiftly to respond to the initial travel restrictions.
Wherever possible, educational institutions are offering courses online, and offering a wide range of support to affected students, including semester and staffing changes and a scale-up of digital course alternatives.
As the spread of the virus continues, our universities and education providers are well prepared to manage potential closures.
Students are advised to check with their individual institution to see what support is available to them.
International Education sector support
Austrade is working with our state and territory and federal partners to provide up-to-date information and advice to minimise disruption to the sector and our international students, both in Australia and abroad.
The Study in Australia website is the central point for information relevant to international students, sourced from all relevant Australian Government departments – Health, Home Affairs, Education and Foreign Affairs, and Trade and Investment.
This Study Australia resource hub is a central source of messages, assets and resources for sector partners. The MIP Weekly Newsletter continues to distribute International Education sector relevant updates.
- McKinsey & Company
- Department of Home Affairs
- Department of Foreign Affairs and Trade
- Department of Health
- World Health Organisation (WHO) has daily updates on the COVID-19 outbreak.