Imagine that in the year 2022, China’s economy slows significantly. COVID- 19 causing a decrease in demand for major exports of Chinese goods. Then answer the following questions.What do you anticipate will happen to Chinese employment? Please explain your reasoning for each of your predictions and show graphically as appropriate. ?
Answers
Explanation:
Key points:
The outbreak of the novel coronavirus (COVID-19) is for the time being the most significant black swan of 2020
The expected impact of COVID-19 could be larger than of SARS in 2002-2003
China has reacted fast in comparison to SARS and introduced several unprecedented containment measures affecting the economy
The impact of the coronavirus will mostly hit China's first-quarter growth. It could extend to the second quarter as well if the outbreak lasts longer. The overall impact is likely to lower the Chinese real GDP growth rate in 2020 to approx. 5.4%
The Chinese economy is likely to bounce back after the outbreak is contained with a rise in the activity in the Q2/Q3 of 2020
The disturbance to industrial production and global trade flows and global logistic networks could be more severe due to a drag caused by the prolonged production shutdowns
Background information
The outbreak of the novel coronavirus (COVID-19) is for the time being the most significant black swan of 2020 apart from the increased tensions between the US and Iran which could adversely affect not only the Chinese but the global economy as well.
On 31 December 2019, the World Health Organization (WHO) China Country Office was informed of cases of pneumonia unknown etiology detected in Wuhan City, Hubei Province of China. The Chinese authorities identified a new type of coronavirus, which was isolated on 7 January 2020. On 30 January 2020, WHO issued a Public Health Emergency of International Concern. As of 16 February 2020, WHO reported 51,857 confirmed cases worldwide affecting 25 countries with the epicenter in the south-eastern part of mainland China with 51,174 confirmed cases (with the highest number of cases in Hubei (38839), Guangdong (1316), Zhejiang (1167) and Henan (1231)). The number of deaths reported so far amounts to 1666 in China and 3 abroad. WHO asses the risk of the global pandemic as high and with reference to China as very high. At this stage, we do not fully understand how the 2019-nCoV spreads. This makes containment efforts difficult. WHO officials state clearly that at this stage one cannot predict the direction, duration, scope and scale of the epidemic. This creates an extra dose of uncertainty. Some experts expect the outbreak to last at least until May 2020.
The impact of COVID-19 outbreak on the global economy could be more severe than the impacts of the other major outbreaks in recent history e.g.: SARS (2002-2003), MERS-CoV (2012 -), A/H1N1 (2009-2010) or Ebola (2013-2016). For many reasons - the origin of the COVID-19 should be compared to SARS pandemics which originated from the Chinese Guangdong.