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Wuhan and the World
h/t Instapundit
[L'Ombre de l'Olivier] - Will the current Wuhan Coronavirus epidemic be worse than SARS? And if so what does that do to the world and particularly the world economy?

Quick answer is yes, but not a massive pandemic and it’ll be bad but not disastrous for most of the globe. The PRC, however is probably in a world of hurt.

...Working on the assumption that the current spread of cases is accurate (60%+ Hubei, 30% rest of PRC, under 10% everywhere else) and that the mortality rate remains at or below the current 2-4% and going on a WAG infection rate of less than 10% of those exposed I think we could be looking at a worst case global death rate in the low millions (say 2 million or so) of which all but a few tens of thousands will be in the PRC and 60% in Hubei. Quite likely the body count will be in the thousands (or possibly tens of thousands) with just hundreds in the rest of the world and if the various quarantine measures work we could see just thousands in the PRC and only a few dozen outside. All in all I would guess the death rate outside the PRC (and probably within the PRC but outside Hubei) is going to be an infinitesimal blip on the regular mortality figures.

So what does this do to the global economy?

I’m doing this analysis based on the theory that we won’t see a global pandemic and that even within China actual infections and fatalities will be relatively low ‐ albeit higher than currently reported because, as everyone knows, the Chicoms will definitely be lying a bit (so a total of thousands of Chinese deaths, possibly 100 outside the PRC). If we’re in global pandemic mode (millions of deaths worldwide) then the simple answer to "what does this do to the economy?" is simple ‐ it causes a depression to make 2008 seem like a minor blip.

...there’s a big question of what idling Chinese factories for several weeks will do to the general economy. Right now we have Chinese companies reneging on contracts to purchase raw materials, which isn’t good for the exporting nations if this continues, but overall isn’t a huge global economic hit.

...Over at his blog, Peter Grant has a link filled article
(https://bayourenaissanceman.blogspot.com/2020/02/coronavirus-spiraling-economic-impact.html)
pointing to potential supply chain problems and there are a number of other pieces worrying about the automotive industry in particular as Wuhan is the Detroit of the PRC and home not just to Chinese vehicle factories (both domestic and foreign) but also to component suppliers who export a significant fraction of their production. Undoubtedly other industries will also discover that parts of their supply chain are in the PRC and that they don’t have a non-Chinese second source. However, assuming we’re looking at a month or two of disruptions to the PRC manufacturing sector, this is going to be a quick hit and a major incentive for every manufacturer in the rest of the world to second source components from somewhere else and also to look at storing two or three weeks capacity of components etc. Thanks to Trump and his trade war this was in process to an extent so the virus is likely to accelerate deals that were already under evaluation. Longer term that’s going to be bad for the PRC but it seems to me it can only be a good thing for the global economy as a whole which will become significantly more resilient to future shocks.
Posted by: g(r)omgoru 2020-02-10
http://www.rantburg.com/poparticle.php?ID=563128