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The outbreak of a SARS-like coronavirus (2019-nCoV) is
developing into a major potential economic risk to the Asia-Pacific
region now that there is medical evidence of human-to-human
transmission. A total of 224 cases of pneumonia caused by the new
coronavirus had been confirmed in China by Monday 20 January 2020,
although the total number of coronavirus cases could be even
higher. Fifteen medical staff in Chinese hospitals, who were
treating patients with the Wuhan virus, have also contracted the
virus.
With a number of coronovirus cases having already been detected
outside of China, this outbreak is particularly concerning just as
the Chinese New Year season gets underway, with millions of Chinese
tourists travelling both within China and to many popular Asian
tourist destinations, such as Thailand, Vietnam, Japan, Singapore
and South Korea. Confirmed coronavirus cases have been identified
in Thailand, Japan and South Korea already.
Now that the coronavirus has been found to be able to be
transmitted from human to human, the economic consequences could be
extremely concerning for the Asia-Pacific region. The 2003 SARS
crisis created a severe negative impact on GDP growth for the
Chinese economy and also hit the economies of a number of Southeast
Asian nations, including Malaysia, Singapore and Vietnam. However,
other economies are also vulnerable, with the SARS epidemic having
also had a negative impact on the economies of Canada and
Australia. Since the 2003 SARS crisis, China's international
tourism has boomed, so the risks of a global SARS-like virus
epidemic spreading globally have become even more severe.
Sectors of the economy that are particularly vulnerable to a
SARS-like virus epidemic that can be spread by human-to-human
transmission are retail stores, restaurants, conferences, sporting
events, tourism and commercial aviation. A key concern is the
potential risk for the Tokyo Summer Olympics in July-August 2020.
Therefore, containing the current virus outbreak has become a key
priority for Chinese and international health care authorities,
with enhanced screening of travelers now being put into place in
many major airports worldwide.
Posted 23 January 2020 by Rajiv Biswas, Executive Director and Asia-Pacific Chief Economist, IHS Markit
