The coronavirus is drawing comparisons to the SARS outbreak, which paralyzed the economies of China and Hong Kong for weeks in 2003.
But what happens in China carries a lot more weight these days: In 2003, China accounted for 4% of global output. Now its share is 16%, according to the World Bank.
The SARS experience offers some reason for economic optimism. That outbreak, centred in southern China, initially clobbered the Chinese economy. In the April-June quarter of 2003, China's economic growth dropped to an annual rate of 9.1% from 11.1% the previous quarter, noted economists Tommy Wu and Priyanka Kishore of Oxford Economics. But as the health crisis subsided, growth picked back up, recovering to a 10% annual rate in the second half of the year.
The Chinese economy has also been buffeted by a trade war with the United States. The two countries signed a truce earlier this month that was expected to provide some economic relief. Then the viral outbreak hit. "I think the first quarter looks like it will take quite a significant hit," said Rajiv Biswas, chief Asia economist for IHS Markit. "This still is escalating, so it's hard to talk about when this will be contained."
The impact in other developing Asian countries might reduce their 2020 economic growth by 1.5 to 2 percentage points, according to a forecast by Edward Glossop of Capital Economics.
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