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Akira Kawamoto notes that government's strict containment measures are disrupting supply chains and tourism across Asia

Akira Kawamoto notes that government's strict containment measures are disrupting supply chains and tourism across Asia

Since a new type of coronavirus was reported in Wuhan, China, last December, the number of people infected worldwide has soared to over 60,400, and the death toll now exceeds 1,300. The virus is spreading across Asia – including to Japan, South Korea, Singapore, Thailand, Vietnam, and Malaysia – and also to countries in Europe and North America, although only one death has been reported outside China so far.

It remains to be seen how lethal this new virus ultimately will be. At the moment, it is certainly less severe than the 2002-03 SARS (severe acute respiratory syndrome) epidemic, caused by a different coronavirus. The new bug has killed more people, but SARS was deadlier, killing almost 10% of the 8,096 people worldwide known to have been infected.

Nonetheless, on January 23, Chinese President Xi Jinping’s government announced a lockdown of Wuhan, a city of 11 million people. Since then, the number of Chinese cities under quarantine has risen to 16, and more may follow.

The quarantines and other compulsory measures aimed at containing the disease are severely handicapping the Chinese economy, with knock-on effects elsewhere in Asia. Wuhan, for example, is the capital of Hubei Province, one of China’s industrial centers. Leading Japanese carmakers Honda and Nissan have factories there, as do several of their European rivals. Producers of car parts, electronic components, and industrial equipment also have important manufacturing facilities in the region. Many of these factories have had to halt production, because their employees have been unable to return after the Chinese New Year holiday.

These shutdowns constitute a major shock to global companies’ supply chains across Asia. Based on the value of its exports to mainland China and Hong Kong relative to GDP, Taiwan is likely to be the hardest hit, followed by Vietnam, Malaysia, and South Korea. Regional employers face a further supply shock because many Chinese working in Japan or other Asian countries will not or cannot return from China. Furthermore, the coronavirus outbreak will disrupt exports of Chinese products to Japan, in particular processed food and clothing. All these factors will cause supply shortages and thus dampen economic growth among China’s trade partners.

The coronavirus also will cause a large demand shock, not least because Chinese travelers have been a great boon to many countries’ tourism sectors. Chinese tourist numbers are now falling sharply as China bars its citizens from group tours abroad, and many countries refuse or restrict the entry of Chinese. Judging by the size of Chinese visitors’ expenditures relative to GDP, popular destinations such as Thailand, Vietnam, and Singapore will take the hardest hit. Japan will be especially concerned should the outbreak persist, because the Summer Olympic Games are scheduled to start in Tokyo on July 24.

But even if the virus is a long way from reaching its peak, China can mitigate the negative aggregate-demand shock with stimulus measures such as the one announced by the People’s Bank of China on February 2. Other governments and central banks in the region can take similar steps if necessary. Companies can substitute disrupted supply chains with alternative sources of inputs, and consumption may shift further online. Some of these changes may turn out to be permanent.

Although it is not clear how quickly an effective coronavirus vaccine can be developed, the duration of the current crisis will depend on two main factors. The first is whether and when the Chinese authorities can bring the situation under control. With the death toll still mounting, it is hard to tell, but if the government quarantines more cities, then the economic downturn will certainly steepen.

The second question is whether other countries can contain the virus’s spread. Some Japanese medical experts say that a substantial number of Japanese must already be infected, given that people arrived freely in the country from China for a month after the outbreak began. Unlike in China, however, the virus has caused no deaths in Japan so far, which raises questions about to the nature of the disease and how best to prevent and treat it. In order to determine the best public-health response as quickly as possible, China and other affected countries should share their current experiences immediately.

In fact, medical experts recommend shifting preventive resources from countries’ borders to the interior, by giving people easy access to self-inspection kits. Those who are infected should then be ordered to stay home and avoid contact with others.

As in the case of influenza, sharing information with the public may be much more effective in minimizing the spread of the coronavirus than draconian restrictions on freedom of movement, which are very costly to humans’ physical and psychological health, as well as to the economy. Other governments currently considering national responses to the new virus should bear this in mind. And the Chinese authorities should consider reviewing their approach to future outbreaks.


Akira Kawamoto, a former deputy director general in Japan’s Ministry of Economy, Trade, and Industry and a former OECD principal administrator, is a professor at Keio University.  Copyright 2020 Project Syndicate, here with permission.

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38 Comments

Actually China did a good job of containing it, but don't fall for the hype of catching the virus according to many social media sites. In real life you have more risk of catching STD in Hamilton than catching this virus !

Cowpat, just ask your GP for some penicillin..

Guess where all the pharmaceuticals are manufactured these days? Good luck getting any out of China when the West gets hit.

China have (thrown massive resources) not controlled it yet.
President Xi had a long call with Trump last night.
He's in a tight spot.

Kudlow said President Xi Jinping had assured President Donald Trump that Beijing would accept US help, but “they won’t let us”.

https://www.theguardian.com/world/2020/feb/14/coronavirus-china-not-bein...

A senior White House official has called on Beijing to be more transparent over its handling of the coronavirus outbreak as Chinese authorities expanded “wartime” measures to limit its spread.

Casualties from coronavirus reached nearly 1,400, with more than 5,000 new cases reported on Friday, dampening optimism that the virus will soon be contained.

10
up

Ring-a-ring-a-rosies
A pocket full of posies
A tissue, a tissue
We all fall down

Professor Neil Ferguson states on the COVID-19 Outbreak “We’re at the eary stages of a global pandemic” (BBC News)

https://www.youtube.com/watch?v=onKAInxctpA

I hope he's wrong, but....

First and foremost, Chinese people and many others all over the world have the utmost confidence in CCP's capability in dealing with adverse events of such scale, urgency and complexity. There is no other political party in the world being able to mobilise this much human and capital resources to contain the virus, look for the cure, make sure patients being well looked after, and keep the economy function when it is almost in idel mode.

WELL DONE, CCP!
WELL DONE, China!

Second, this adverse event highlights the importance of the Belt and Road Initiative (BRI)! The whole world needs BRI for a much diversified global consumer market and risk resistant and disruption-free supply chain.

I believe the world will become a much united and consolidated place after this event. After all, as President Xi said "We are living in a community of shared future for all humankind"

Stay healthy everyone!

How serious is the epidemic in Wuhan? Industry exposed factory is making millions of corpses

The outbreak of pneumonia in Wuhan has greatly increased the number of infections and deaths. How serious is the epidemic? After the Wuhan Funeral Home asked for help from the society to transport the body bags online, more industry exposures were revealed. The CCP is rushing to make millions of body bags , which has attracted public attention.

In order to cope with the increasing number of new cases of coronavirus (Wuhan pneumonia) infections and deaths, Wuhan has successively built new Vulcan Hill Hospital, Lei Shenshan Hospital and more than 10 square cabin hospitals.

Free Asia revealed on the 10th that the cabin hospital is now overcrowded. Officials in Wuhan have begun to requisition elderly homes and more than 10 Wuhan University dormitories as isolation camps. It can be seen that the severity of the Wuhan epidemic is absolutely beyond the imagination of the outside world.

https://www.ntdtv.com/b5/2020/02/12/a102775027.html

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up

Dear xingmowang, saying things - even repeating them again and again - doesn't make them true. It may be what the CCP wants to hear. But truth is something else. And the world wants keenly to hear it from the CCP. It may, of course, trickle out, from underneath the CCP's tyranny, to the disgrace of the state, and the disgust of the world outside. But, right now, there's no sign of it. Instead we seem to be in the early days of The Great Lie. A little like a new version of The Great Leap Forward (20-40 million dead).

According to wikipedia ""The exact number of famine deaths is difficult to determine, and estimates range from upwards of 30 million, to 55 million people."" I usually see the figure published as 45 million. But the big debate isn't the numbers but whether it was deliberate policy to eliminate all rivals or alternatively severe incompetance caused by the unwillingness of party officials to pass accurate data upwards (harvest sizes, death rates, etc).
This virus was not deliberate killing of chinese and whether given all the circumstances it could have been handled much better is also being debated; more openness may have meant more panic or it might have saved many lives.

With openness about the problem people would have immediately altered their behavior and avoided contact and possibly self-quarantined (though that is questionable given Chinese have a strong tendency to extreme selfishness). That would have dramatically slowed the spread of the disease, and reduced load on hospitals - allowing better treatment of afflicted and better tracking of transmission and probably saved millions of lives over long term. Chinese governance is a menace to Chinese and the world.

The poor guy is just working on getting his social credit score up. Maybe he is saving up to be allowed on a train.

Yeah, you gotta pity his pathetic desperation.

Dear xingmowang, go and find few more islands..!

ha ha i reckon xingmowang is a troll...and knows as much about China as Adam and Eve.

Great new satirical posts you're putting up, Xi Jr.

Agreed :-) China will bring answer to the global economic uncertainty, The whole world will do the united front works by voluntary - after all recognising that Chinese, CCP, mindset, think tank were actually the most viable option for the world unity in economic wealth, cooperation.. etc. - I just wish those that started WWI & WWII - actually imported these Chinese mindset, as it's already proven for 5000 years! - Human so dumbkoft, from willingness to admit/follow the dear leader - China is for the world & the world must follow China - March on, forever! dong dong do..

So "the Chinese authorities should consider reviewing their approach to future outbreaks". Seriously? To review their approach would mean dissolving CCP tyranny over the free exchange of information; putting the expertise of clinicians above the interests of the Party and its officials; accepting that there is such a thing as objective reality, which may not coincide with CCP assertions; and meeting the basic requirements of internal and international honesty, trustworthiness, responsibility. It would be doomsday for the CCP.

The first thing they need to do is to ban these horrid wildlife markets!!!!

A month or two ago if you would say anything about the disgusting mistreatment of animals by the Chinese you'd have a squad of woke goons dogpiling you for "racism".

Funny how reality asserts itself sometimes.

Yeah just like if you question the volume of immigration to NZ you get labelled racist...

Really Xenophobes comment, the local Chinese authority in NZ will note that remark, you will need to apologise quickly.
Friend did the same mistake mentioned to one of them to at least follow those Uyghur Moslem practices (selective items, so not all Moslem practices).. it's derived from Hebrew time, thou shalt not eat those creature with odd number of fingers, those creature with fangs etc... before finish, the person walk away from talking.. spitting & swore wak u ko bek tu u konty.

Being a little cynical but with a grain of truth . . .
Put off booking that holiday to those tourist destinations most affected by downturn in Chinese visitors; “Thailand, Singapore and Vietnam”.
Lots of bargain holiday deals likely in near future. Experience of coups in Fiji and Thailand. and tropical cyclone are no deterrent to Kiwis only too happy to dodge a few bullets or put up with a little storm damage if the holiday package is a bargain.
I had an interest in Fiji tourist numbers at the time of the Fiji coup in 1987; in the months following the coup Kiwi visitor numbers actually showed considerable increase as USA visitor numbers plummeted to near zero (and US airlines pulled out never to return).
Kiwis are more risk tolerant than most nationalities (pretty unique to see a Kiwi with a face mask at best on times - usually last thing we see just before passing out for an op), and we really do like that cheap holiday.

Reminds me of a joke I heard when I came to NZ in the 90s.
A kiwi pub landlord won the lottery and to give back to the community started selling his grog for 10 cents in the dollar. A tourist couldn't believe his luck but was puzzled about all the sour faced patrons in the corner not drinking.
The landlord explained they were kiwis waiting for happy hour.

So true Smalltown.
While sympathising for their predicament; it is not a great surprise that the New Zealanders caught up in the cruise ship quarantine are in the cheaper inside cabins without windows.

I just got a cruise ship flyer in the mail with discounted prices. Go figure

youngdumbandbroke
Not a surprise at all - also read my comment above. :)

Thailand is certainly nothing like it used to be. Overrun with teeming hordes of Chinese tourists bobbing around in lifejackets these days. Could be a window of opportunity.

https://www.theage.com.au/world/asia/china-expands-chaotic-dragnet-in-co...

Instructions from on high in China- "...round up anyone who should be rounded up"

Will a side effect of the Wuhan virus be a tendency to be a Muslim, have a rare blood type kidney/ liver etc, or have leanings to the Dalia Lama or be against the B+R or just dont adhere to all Xi Chinas other corrupt practices?

Near 100% chance that the PRC is experimenting with Wuflu treatments on the Uigher concentration camp prisoners.

seriously xingmowang?? Your comments??!
U got your head up you're a---?
you a real propaganda stooge.
LOL

Sure he does and is, but for some perverse reason it's fun to read his comments.
Must admit though that sometimes he hits the nail on the head... unless the nail is made in China.

Yeah he's full of shit but it's entertaining

I question the figures that are being published. Over 1383 have died but as of today only 6766 have recovered. Once you catch it, you can only either recover or die, so on the basis of end results, the death rate is 17%. What has/is happening to the balance of the 64441 people infected. If we can say that the death rate is only about 2% of those that catch it, then we can equally say that the recovery rate is 10.4%. The figures don't add up by a long chalk and I strongly suspect that the Chinese have totally lost control and are grossly lying about the figures.

Think about which direction that they are motivated to lie about the figures. Exaggerate the recoveries and understate the infections and deaths. In other words things a almost certainly one hell of a lot worse than we are being told and our naively stupid government is once again under reacting. We have too many examples of their under reaction. Measles, meningitis in the north and all the MPI failures demonstrate how easily infections get away on us if we under react. The default setting should always be to over react at the start and only when information becomes clearer and more reliable, ease off as appropriate within in an envelop of safety. I don't think we are doing this. Eg weak questioning of NZ residents returning from China and totally weak voluntary self quarantining. They will not do that; look at all the stuff that they try to get through past our boarder inspectors. More practically, how are they expected to survive and pay the mortgages if they do not work. Honestly, get real!

The Chinese government probably have the fullest, unvarnished picture and while they tried to ignore the problem initially, they now have the most strict regime in the world. We should be taking a lot more notice of what they are doing, and a lot less in what they are saying.

The first but not the only change that I would be making, would be to require those people with Chinese passports to remain in China, even if they have NZ residency. Not permanently, just until we have control and a far more accurate picture of what is going on.

Don't worry China will resolve this, as any other problems on this planet. Put our trust in China, they'll fix this world economic unwell - this Covid-19 just a little show case, China is the economic answer for the world. There's no two way about it.

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Days to the General Election: 38
See Party Policies here. Party Lists here.