One Country Has a Lot to Worry About When It Comes to Coronavirus

Rahul Sen

The economic repercussions of the coronavirus outbreak worldwide and for New Zealand are beginning to emerge – and it is already clear that the coronavirus will have a worse impact than the severe acute respiratory syndrome (SARS) outbreak in 2003.

The estimated costs of SARS to the global economy was about US$40 billion. China’s share in world GDP at that time was 4%, significantly lower than the current estimate of 17%.

This four-fold increase in economic dependence on China worldwide, primarily because of its status as a manufacturing hub and a key node for production networks in Asia and globally, means that the outbreak is likely to have a bigger global impact on trade, at least in the current quarter.

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