China Sneezes & the World Holds Its Breath - EconVue Spotlight February 2 2020

The outbreak of the 2019 novel coronavirus is so potentially impactful that we are devoting this entire edition to the epidemic, to an attempt to gauge its seriousness. Some stories are so big that it is hard to get your arms around them and this one definitely fits that category. Social media wasn't a factor during the 2003 SARS epidemic. The Chinese economy was a much smaller percentage of global GDP, and travel to and from China was far less common. So a simple comparison to SARS is not enough.

My fellow Chicagoan Michele Wucker has been rightly indignant that the emergence of 2019-NCov has been called a "black swan" event. This was a crisis waiting to happen, in her parlance a gray rhino- and not much was done to prevent it.  The irony in my view is that although strong central control delayed communications at critical phases, centralized control (including big data) also means that the Chinese government is able to react in ways that would be unthinkable in the US: building hospitals in a week, cancelling both public and private celebrations of the biggest holiday of the year, mandating nationwide quarantines and domestic travel bans. Imagine Chicago being cordoned off. I think it would be impossible.

What has been amazing and quite positive is the huge output of information and international cooperation. Whether or not the statistics are correct, websites such as https://www.biorxiv.org (Cold Spring Harbor Laboratory) have had an astonishing number of papers on the Wuhan virus posted by researchers around the world in just the past week.  Reading through them is a challenge, and one needs to bear in mind that these papers are generally based on small sample sizes and have not yet been peer reviewed. An example: findings that the disease is affecting mostly Asian males due to ACE receptor issues is based on a study of only eight patients. This could turn out to be true, but it is too soon to say. US and Chinese statistics aren't always comparable either. Cause of death in China is based upon the underlying cause. If you have lung cancer but die of the flu, the death certificate will cite lung cancer. 

One positive outcome, as the 14th 5-year plan (2020-2025) is being written in Beijing, is that healthcare and food safety could rise to the top of the agenda. That would be good for China, and for the rest of the world. Yanzhong Huang at the Council on Foreign Relations has been writing about patient violence and the unequal distribution of healthcare in China for more than a decade. Now more people are listening. 

In the links below you will find below a wide range of views, from the hopelessly pessimistic to the stubbornly optimistic on how this crisis began and where it is heading. In spite of years studying China's economy and its healthcare system, I find myself unable to predict in this case, what's next. Tonight at 9 pm EST the special task force on the Coronavirus will be holding a press conference in Beijing and that might give us some useful clues. Research will continue.

Until then, I agree with my fellow Camp Kotok attendee Danielle DiMartino Booth: "Tonight I’ll have one eye on Super Bowl & on the Asian open with a particular eye toward a slew of Australia’s January data including its latest on manufacturing & job openings." Will the the clock run out on Australia’s nearly three decade run without a recession? The combination of bushfires and a Chinese virus are likely to hit the Lucky Country hard. The Wuhan virus will certainly be a shock that will impact the global economy.  We just don't know for how long. 

Big Picture Perspectives

Stop Calling the Coronavirus Outbreak a Black Swan
Michele Wucker 1/27/2020 Linkedin

A predictable and preventable risk. “The best way to catch outbreaks early and contain them is to have a robust healthcare system.” And not as University of Chicago Professor Dali Yang has said, value "stability at all costs".

Yanzhong Huang on the Wuhan Coronavirus and China's Disease Control System (Podcast)
Council on Foreign Relations 1/24/2020

Dr. Yanzhong Huang, senior fellow for global health, shares his perspectives with C. V. Starr Senior Fellow and Director for Asia Studies Elizabeth Economy on the disease’s cause, the Chinese government’s response, and potential areas for international collaboration.  

In Sickness and in Health
Yangyang Cheng 1/29/2020 Supchina

He Jiankui and bioethics, Chinese hospitals and patient violence, the coronavirus and lockdown of Wuhan, and politics during times of emergency. The author is a physicist, and a truly lyrical writer.

People outside the statistics: They died of "general pneumonia"?
2/1/2020 Caijing

This is a cached translation of the original Chinese article in this highly respected publication which was later censored. Sadly, underreporting is to be expected in this type of fluid and chaotic situation.

After Being Punished by Local Police, Coronavirus Whistleblower Vindicated by Top Court
Qin Jianhang and Timmy Shen 1/31/2020 Caixin 

Local Red Cross under fire over China coronavirus donation mess
Shaun Yuen 2/2/2020 Aljazeera

Classic Amartya Sen moment. Plentiful supplies of masks in Wuhan but faulty distribution and information. Famine and disease are not that dissimilar in that lack of information can be a primary cause of each.

Chinese Economy

The PBoC said it will inject 1.2 trillion yuan liquidity on Monday via open market operations.
2/2/2020 The People's Bank of China

That is about $175 billion of liquidity. To compare, the Fed’s overnight repo operations are running about $55B. It is equal in value to about 15% of China’s US treasury holdings.

Will the Coronavirus Cause a Major Growth Slowdown in China?
Shang-jin Wei 1/27/2020 Project Syndicate

Countermeasures are already being deployed to balance the economic effects of the coronavirus.

The Economics of Pandemics and Quarantines
Vincent Geloso  1/28/2020 The American Institute of Economic Research

The contrast provided above suggests that soft-handed measures are cheaper and more effective in diminishing contagion than heavy-handed measures. This is something worth bearing in mind as news keeps unfolding about the reaction of authorities in China to the outbreak of the coronavirus.

Research

The 2020 Coronavirus Outbreak – What We Know So Far  (Video)
1/27/2020 JAMA Network

Best overall expert take, terrific interview.

Once coronavirus starts to spread, there’s no stopping it until it’s done (Video)
1/31/2020 Fox Business

And here is the negative view that the virus will be with us for months, worldwide, in spite of travel restrictions. Interview with Center for Infectious Disease Research & Policy’s Michael Osterholm. 

Nowcasting and forecasting the potential domestic and international spread of the 2019-nCoV outbreak originating in Wuhan, China: a modeling study
The Lancet 1/31/2020

The theory behind the quarantines to stop the spread of the Wuhan virus.

Mining coronavirus genomes for clues to the outbreak’s origins
Jon Cohen 1/31/2020 Science Magazine

Finding the origin of the coronavirus outbreak is critical to stopping its spread. We still don’t know where it began. There are persistent rumors that this time is different because the virus was manmade.

Top WHO official says it’s not too late to stop the new coronavirus outbreak
Helen Branswell 2/1/2020 Stat

A more optimistic view. So far, the virus is mostly affecting Chinese males over the age of 40. Smoking could be a factor in mortality probabilities, but too soon to tell.

In a Recent Simulation, A Coronavirus Killed 65 Million People
Kristin Houser 1/27/2019 Futurism

The troubling implication remains, though, that if 2019-nCoV reaches the pandemic level, it might already be too late to prevent the millions of deaths predicted by Event 201.

using big data to track the confirmed patients' moving path in the city
Jin Ding 1/25/2020 Twitter threads

The upside of big data and facial recognition in tracking contacts and mapping disease vectors.

Early Transmission Dynamics in Wuhan, China, of Novel Coronavirus–Infected Pneumonia
The New England Journal of Medicine 1/29/2020

On the basis of this information, there is evidence that human-to-human transmission has occurred among close contacts since the middle of December 2019. Considerable efforts to reduce transmission will be required to control outbreaks if similar dynamics apply elsewhere. 

'That's a problem': Indonesia's coronavirus vulnerability revealed
James Massola 1/31/2020 the Jakarta Post

Indonesia is the 4th largest country in the world by population, but lacks the reagents needed to detect the Wuhan coronavirus. Which explains why there are no reported cases there. And illustrates the uneven distribution of healthcare around the world.

Australian lab first outside of China to copy coronavirus, helping vaccine push
Sophie Scott, Penny Timms and Loretta Florance 1/29/2020 ABC

"We got it": The game-changing moment when this Australian lab copied the coronavirus.