Notes on some of the raw economic numbers from the Wuhan virus 2020 vs SARS 2003, for scenario painting purposes
- In 2003, during SARS, China was 7% of global GDP. In 2020, China is 17% of global GDP.
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- China’s own GDP growth in 2003 was 10% for 2020 to drop below 6%? Just announced possible 5% this year, which is bad for China.
- According to one calculation, global GDP was reported to have lost approx. $40b in 2003 so now, it will be $97b? (but that’s still less than $1t). What and how deep impact on other countries, how far away and what chain reaction?
2. China’s consumer spending was 35% of GDP in 2003. 2009 it was 76% of GDP.
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- But if a good proportion (not specified) is digital (Alibaba, Tencent, JD, Meituan etc) would the impact be less?
- What will impact of investment spending on GDP be in 2020?
- S&P estimates that if consumer spending falls 10%, global GDP will fall by 1.2%
3. China tourism in 2019 was 260m (130m more than 2003). More of a global impact than previously. Will pent up demand from 2H2020 make up for falls in 1Q?
4. During the SARS period in 2003, the service industry amounted to 42% of China’s GDP. As of 2019, the service industry amounted to 54% of China’s GDP.
5. Off-shore renminbi now fallen below 7 RMB to US$1. Off-shore demand more trade than investment dependent and weak anyway.
6. In 2003, HSI was down 17% and MSCI China was down 14%. In Jan 2020, HSI, MSCI China and MSCI Asia Ex-Japan down only 5, 6 and 4% respectively and global MSCI down 2% since Jan 17. HKSE down 2.6% Tokyo down 1.5%. When Shenzhen, Shanghai reopened, US productivity numbers pulled US markets up, but China bracing for measured downturn. What are the shock absorbers that are holding up the global marketplace today that did not exist in 2003?
7. The common flu kills approx. 35,000 (0.1% of all affected) in the US every year. The Wuhan virus killed a bit more than 300 so far (2% of all affected) and happily >400 recovered in Wuhan alone.
8. Interestingly, the H1N1 swine flu of 2009 that originated in Mexico/US has killed more than 200,000, but the literature says that it’s just 0.02% of all affected, although it is still killing people in its post-pandemic stage today. The pandemic and China’s response is being berated by US media, camouflaging the real chilling discussion of the US own inability to mobilize crippling healthcare costs and facilities in a similar eventuality.
The speed with which China and neighbouring countries worked at isolating the propagation of the flu, and the abilities of the new digital economies to absorb and recover from the economic slowdown sets new benchmarks and are instructive on social infrastructure required for future societies.
Data E&OE from various sources.
Emmanuel Daniel
