Typhoon Saola Shakes the Pillars of Global Markets
As Typhoon Saola prepares to unleash its fury on Hong Kong and China’s southern coast, local economies are grinding to a halt.
Schools, transport services and businesses are being forced to close and there are concerns the fallout will extend far beyond those regions in the line of fire.
The Onslaught of Typhoon Saola
The gravity of Typhoon Saola has warranted China’s National Meteorological Center to issue a red alert – the highest level in its four-tier warning system.
According to the state-run Global Times, the typhoon is set to make landfall in the coastal areas of Guangdong Province and the Hong Kong Special Administrative Region (HKSAR) on Friday.
The immediate consequences are far-reaching – multiple regions have postponed the opening day of schools, halted public transport, and ceased production activities.
In anticipation of the disaster, more than 100,000 people have been relocated in eastern China’s Fujian province.
In Shenzhen, all inbound and outbound flights at Shenzhen Bao’an International Airport have been suspended, and the start of the school year for primary and secondary schools has been delayed.
Financial Centers on Red Alert
Hong Kong has put its financial activities on hold by suspending stock market activities, grounding flights, and also closing schools.
A T8 threat warning has been issued by the finance hub as Saola’s wind speeds reach alarming levels, topping 205 kilometers per hour.
With Hong Kong’s stock market – a cornerstone of the global financial system – temporarily out of service, the implications could have a ricochet effect on international trading and global stock indices.
Manufacturing and Supply Chains in Jeopardy
China’s role as a manufacturing colossus makes the suspension of production activities in various regions a matter of global concern.
Several areas have ceased production, business, and transportation, as reported by the Global Times.
This disruption could create a snowball effect, rippling through global supply chains, which are already reeling from other geopolitical pressures.
As a chief supplier of everything from electronics to apparel, China’s halt in production could lead to global price increases and product shortages.
The Transport Quagmire
The halting of public transport and grounding of flights has short-term and long-term economic ramifications.
With 121 passenger trains scheduled to suspend services, internal mobility is affected, possibly leading to labor shortages in critical sectors.
Additionally, the suspension of ferry services and flights will delay the global transport of goods, leading to disruptions in logistics.