PGI Insight - China: Coronavirus to cause prolonged supply chain disruption

07 Feb 2020

PGI Insight - China: Coronavirus to cause prolonge...


  • An outbreak of new coronavirus that causes a respiratory illness was first detected in the Chinese city of Wuhan, Hubei province, in December 2019. The virus has killed more than 600 people and prompted Chinese authorities to quarantine several major cities.
  • Authorities have ordered businesses in over 20 provinces across the country to remain closed until at least 10 February, while businesses in Hubei province will remain closed until at least 14 February.
  • The manufacturing sector is at a high risk of prolonged disruption. Supply chains may provide a vector for the spread of the disease, and as such authorities are likely to maintain restrictions on travel for a long period.
  • Foreign businesses reliant on China’s manufacturing sector will come under pressure to endure the disruption associated with the outbreak or move their supply chains to less risky markets.


Factories across China have been closed for an extended period in an effort to contain the spread of a new coronavirus outbreak. More than 20 provinces throughout the country have instructed businesses not to resume work until 10 February at the earliest to minimise risks of human-to-human transmission. Businesses in Hubei province, the epicentre of the outbreak, will remain closed until at least 14 February. Even if factories reopen on 10 February, it will be difficult to restart production. Many workers had travelled across China for Chinese New Year celebrations before travel bans went into effect, meaning that it will be difficult for employees to return to work.

Sectors affected

There is a high likelihood that the Chinese authorities will extend factory closures to limit the spread of the virus. In manufacturing, industries with a high demand for human labour, such as electronics and garments, are at higher risk of becoming contagion hubs due to the large number of workers, often in poor sanitary conditions. Authorities will likely crack down on anyone violating the closures. Companies may be reluctant to risk opening too soon to avoid repeat outbreaks and recurring business disruption.

The logistics chain presents a significant risk of virus transmission. If the coronavirus spreads to industries such as those mentioned above in other countries in the region, the virus will become increasingly difficult to contain and outbreak recurrences are likely. Within China, authorities are likely to focus on transport suspensions to limit outbreak expansion. Thi s may mean that suspensions on logistics and travel will last for significantly longer than business closures.

Sectors reliant on production in China are likely to be severely impacted by the continued supply chain disruption. This applies particularly to those dependent on commercial aviation, shipping and overland transport. In addition, as more countries close their borders to mainland China, this is expected to cut off the supply of some goods into the country. As more sectors of the Chinese economy are impacted and the regional mobility of supply chains becomes more restricted, the adverse economic impacts are likely to be severe.

Impact to foreign companies manufacturing products in China

Foreign businesses that depend on China’s manufacturing sector will become pressured to either endure the disruption associated with the coronavirus outbreak or move their supply chains to less risky markets. In addition, failing companies in China that want to reduce their liabilities may try to use the coronavirus as a pretext to terminate contracts with foreign companies.

PGI’s Intelligence specialists provide business intelligence and geopolitical risk analysis to multinational corporations and governments worldwide. For more information on how they can assist your organisation, please contact us:

Share this article


Your free global geopolitical
risk dashboard

PGI’s Risk Portal tool provides daily intelligence feeds, country threat assessments and analytical insights, enabling clients to track, understand and navigate geopolitical threats.

The Risk Portal gives users up-to-date information and analysis on global affairs.

The Risk Portal allows users to visualise information in a unique and instantly understandable way. Mapping filters enable the visualisation of incidents by threat category, time period, perpetrator and target type.

Risk Portal users can upgrade their accounts to include the Report Builder and Country Profile Generator features. The Report Builder allows users to select information, data and images from the Risk Portal and create bespoke reports and emails.

Subscribers to PGI’s Bespoke services receive tailored analysis on specific sectors and geographies of interest, delivered at a frequency they determine.

Visit the Risk Portal

GDPR Services

Making ongoing compliance easier for you and your business

GDPR is now in force. Make sure your business meets the necessary requirements, providing assurance for all of your customers and employees.

PGI GDPR Services

A full audit of your business to assess the level of your compliance against GDPR requirements.

Become GDPR compliant with minimal work. We will conduct an analysis, review, report and implement any necessary changes to your business.

We will conduct simple security assessments to help you understand and mitigate the potential risks to your business.

Find out more on GDPR

Compliance Services

Get your business ready to face the cyber challenge.

We provide a full range of accredited, certified and bespoke services that assess the resilience of your cyber security posture.

PGI GDPR Services

PGI’s Qualified Security Assessors (QSA) will help you meet Payment Card Industry Data Security Standards (PCI DSS).

Find out more on PCI DSS

Demonstrate your commitment to cyber security by achieving and maintaining accreditation for the globally-recognised information security standard.

Find out more on ISO 27001

Expert assistance on the implementation and maintenance of governance requirements for personal data.

Find out more on GDPR

Find out more on Compliance

Vulnerability Testing

Understand the threats of phishing and malware to avoid being targeted.

Undertake our phishing vulnerability assessment to reduce your organisation’s risk of attack, by measuring the cyber awareness of your workforce.

Malware & Phishing Services

PGI will conduct a tailored phishing campaign, using multiple methods, to identify realism and train employees where necessary to mitigate future attacks.

PGI monitor multiple metrics to identify the types of phishing, generate in-depth analytical reports and provide an informed decision to help improve your organisation’s level of security and awareness.

Find out more on Vulnerability Testing

Cyber Security

Prevent attacks, respond to breaches and protect your business.

Our bespoke range of cyber security services not only protect your critical assets but provide the education you need to keep your operations and data safe.

Cyber Security Services

Implement this cost-effective cyber security measure launched by the government to prevent cyber-attacks, demonstrate information security commitment to your clients, and attract new business by being recognised as a secure organisation.

Find out more on Cyber Essentials Accreditation

The most effective way to identify how attackers target your organisation’s weaknesses is by evaluating your system, your network security, and reporting on any vulnerabilities that could have an impact on your business.

Find out more on Penetration Testing

If your business has experienced breaches, network compromises or operational disruption, our team of cyber security specialists can deploy quickly, and will begin the process of detecting and eliminating the threat efficiently.

Find out more on Data Breach Response & Recovery

In the event of a computer security investigation, a vital part of the response process is making a copy of your data for safe forensic analysis. We will work with you to preserve and use this evidence to discover the extent of an intrusion.

Find out more on Digital Forensics

Browse our Cyber Security services

Data Breach Response & Recovery

We prevent attacks, respond to security breaches, and protect your business

Our team of specialists can deploy quickly and efficiently to begin the process of detecting, eliminating and preventing future threats of a breach.

Malware & Phishing Services

A vital part of the response process is making a copy of your data for safe forensic analysis. We will work with you to preserve and use this evidence to discover the extent of an intrusion.

Find out more on Digital Forensics

We will identify and minimise the risks, as well as the possibility of future risks to your business.

Consistent interaction with your management team and recommendations on how to approach all outcomes that need attention.

Find out more on Data Breaches

Subscribe to our Cyber Bytes Newsletter

Keep yourself in the loop with PGI by signing up to our Monthly Cyber Bytes email. You will receive updates, tips and narrative around what has been happening in the world of information security.

Get in touch today

For more information on how we can help you or your business, please contact us via:

Related News

International Womens Day - Pioneering Women in Tec...

08 Mar 2017

Pioneering Women in Technology – Katherine JohnsonThe Oscar season has been and gone. The...

Read news article

Law Firms and why they need cyber security

07 Sep 2018

Why Law Firms need Cyber Security. Suffering a data breach can be devastating! From the experts at P...

Read news article

Content from the expert - GDPR and Cyber Governanc...

12 Jul 2017

Will there be a knock on effect regarding the General Data Protection Regulation (GDPR) after the UK...

Read news article
Back to the News Hub

+44 (0)207 887 2699
©2019 PGI - Protection Group International Ltd. All rights reserved.
PGI - Protection Group International Ltd is registered in England & Wales, reg. no. 07967865
Address: Unit 13/14, Swallow Court, Sampford Peverell, Tiverton, England, EX16 7EJ