Medical Crisis Becomes Economic Crisis

ZeroHedge:

China has now placed hundreds of millions of its citizens under quarantine, leaving its economy grinding to a halt.

Workers can’t leave their homes. Factories are idle. Most (if not all) of China’s ports are no longer shipping. International flights are increasingly banned from the country…

 …as The Telegraph’s Ambrose Evans Pritchard points out, “the longer Beijing enforces curbs on work and travel, the greater the global economic shock.”

…China makes the vast majority of our prescription pharmaceuticals.

I was wondering about this only yesterday. What started as a medical crisis looks set to now become an economic crisis.

As the Chinese economy shuts down, shortages will start to appear, and prices will start to rise.  At the same time, with global trade to and from China slowing, the global economy will slump.

About 80% of world goods trade by volume is carried by sea and China is home to seven of the world’s 10 busiest container ports, according to the United Nations Conference on Trade and Development. Nearby Singapore and South Korea each have a mega port too.

“A closure of the world’s manufacturing hub impacts container shipping at large, as it is a vital facilitator of the intra-Asian and global supply chains,” said Peter Sand, chief shipping analyst at BIMCO, an international shipping association. “This will affect many industries and limit demand for containerized goods transport,” Sand told CNN Business.

and

“Am informed from my industry network in Asia about 2/3 of Chinese industrial supply chains to Japan already shut down, almost complete shutdown to So.Korea. Impact on Taiwan, Germany, other big manufacturing exporters must also be severe.”

The Chinese response to the coronavirus epidemic may be triggering a global economic slump. Was their response really necessary? According to one doctor with clinical experience of it:

Based on my clinical observations, this disease is highly contagious, but the mortality rate is low. Those that progressed into the life-threatening stage often occurred in the elderly already with chronic diseases.

Might it not have been better to let the epidemic run its course, while keeping the economy working – as usually happens with flu epidemics? As it is, it doesn’t look like the Chinese have managed to contain the epidemic anyway: more and more cities are being locked down. How long can that go on?

About Frank Davis

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13 Responses to Medical Crisis Becomes Economic Crisis

  1. Joe L. says:

    A new study on the clinical characteristics of 2019 novel coronavirus infection in China (which is not yet peer-reviewed) appears to indicate that current smokers and former smokers are less susceptible to 2019-nCoV.

    Smoking rates in China are currently higher than most other countries in the world, with some figures claiming more than 66% of males smoke cigarettes (including over 60% of male doctors). However, this new study (linked below) claims that of the 1099 Chinese people who contracted 2019-nCoV which were studied, 85.4% (927 people) were never-smokers, while only 12.6% (137 people) were current smokers and only 1.9% (21 people) were ex-smokers.

    Clinical characteristics of 2019 novel coronavirus infection in China

    • Frank Davis says:

      Great find!
      Might it be because smokers are already being quarantined, by being made to stand outside? Or might it be that smoking has antiviral properties?

      I’ve copied the first part of Table 1 which gives your numbers..

      It also appears from that table that iif they do get the disease, they generally get the non-severe version of it.

    • Rose says:

      That is curious isn’t it?

      Table 1 Clinical Characteristics in the PDF

  2. waltc says:

    Why do we let China make our drugs? Popular blood pressure and anti-acid drugs, both prescription and OTC have been linked to dangerous contamination, including carcinogenicity, and have been recalled. These drugs are sold under the brand name of major US pharma companies. Not that it’s even bringing down the costs (which is not worth the trade off) since the costs keep rising. Why are we doing this? Why does the FDA allow it? Ingredients from China in American brands of pet food have also killed digs and cats.

  3. Perhaps taking advantage of a situation in order to retaliate for economic sanctions?
    Perhaps even manufacturing the situation so that this retaliation could take place?
    That’s the best I can think of.
    /shrug

  4. beobrigitte says:

    I have come across some articles about economic consequences (one was Canada) on my search for an update on your “Highly infectious not very lethal” post.
    Although my understanding (and interest) in economics has its limits I will add this aspect to further, now extremely cumbersome, searches.

  5. smokingscot says:

    This article explains that Hyundai have had to stop production of their cars.

    https://learningenglish.voanews.com/a/hyundai-to-halt-production-because-of-coronavirus-outbreak/5273513.html

    And many car manufacturers in China have had to obey.

    It’ll affect a stack of industries from toys through mobiles microchips to shipbuilding. Maybe even Primark!

  6. Pingback: How To Prevent Coronavirus? Start Smoking | Frank Davis

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