The major central banks have used up much of the ammunition they would typically deploy to fight economic downturns since the 2008 financial crisis, and global debt levels have never been higher.
Globalization has encouraged companies to build supply chains that cut across national borders, making economies much more interconnected. But the scale of the impact will ultimately be determined by how the virus spreads and evolves, which is almost impossible to predict, as well as how governments respond,” said Neil Shearing, group chief economist at Capital Economics.Ĭompounding the risk is the fact that the world outside China has also changed since 2003. “The outbreak has the potential to cause severe economic and market dislocation. SARS didn't sink markets, but coronavirus might (Photo by Yifan Ding/Getty Images) Yifan Ding/Getty Images SHANGHAI, CHINA - FEBRUARY 03: Medical workers spray antiseptic outside of the main gate of Shanghai Stock Exchange Building on Februin Shanghai, China. Chinese officials have locked down Wuhan and several other cities, but the virus continues to spread. The new coronavirus, which originated in the central Chinese city of Wuhan, has already killed more than 900 people and infected over 40,000 across at least 25 countries and territories. SARS sickened 8,098 people and killed 774 before it was contained. China’s economy accounted for roughly 4% of world GDP in 2003 it now makes up 16% of global output.
The country also boasts hundreds of millions of wealthy consumers who spend big on luxury products, tourism and cars. It’s grown into the world’s factory, churning out products such as the iPhone and driving demand for commodities like oil and copper. The virus now rampaging across China could be much more damaging.Ĭhina has become an indispensable part of global business since the 2003 SARS outbreak. Nearly two decades have passed since a coronavirus known as SARS emerged in China, killing hundreds of people and sparking panic that sent a chill through the global economy.
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