A large number of electronics and chemical companies, pharmaceutical firms and those from the manufacturing sector are witnessing obstacles in the supply chain due to the outbreak of coronavirus (COVID-19). The situation has pushed the Chinese companies to withdraw from their contractual responsibilities, and more than 4,800 force majeure certificates have been issued as of March 3rd, 2020.
While China has made substantial improvements in containing the novel coronavirus (COVID-19), the economic disturbances are impacting trade relationships, especially for those depending on China since it’s one of the largest trading partners across the globe. Several countries, including China, have imposed lockdowns, travel bans, isolations, and quarantining the affected persons to prevent further spread. Emergency on the international trade remains as it is, and our clients have reported operational as well as business disruptions. Since it is an unforeseen pandemic event, contracts worth 373.7 billion Chinese Yuan ($53.79 billion) are put to stake after invoking force majeure (FM).
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