Corona Virus and Economic Impact

The above show 549 deaths in Hubei out of 564. The death rate in Hubei is way above any other cities even in China. So why is this?

Professor Michael Levitt in the interview below suggest that the death statistics looks more like an instance of poisoning than a viral epidemic because of the localised nature of the deaths concentrated in Hubei. Secondary cities including cities out of China show death rates consistent with the common flu.

What is different about Hubei.

To understand this we have to appreciate why Chinese choose to consume exotic meats. Older generations being generally less educated, believe that consuming such products will benefit them health wise or cure them of certain ailments.

We know that Corona virus jumped from animal to human. Quite likely there was a sick animal which pass the virus to all the people handling it. These people will be the core and source of the infection. Perhaps consumption of the meat was also a health risk especially among older people.

The next round of infection are those that came into close contact with carriers which was made worse by the ability of the virus to spread even in its' incubation stage.

The red flag was first raised on 31st December 2019 and city wide quarantine imposed on January 23. Exposure through close contact probably stopped soon after that as everyone becomes aware of the risks. Quite possibly the virility of the pathogen is greater through direct contact and less from passing proximity or contaminated surfaces.

If 2019-nCov is a deadly killer virus the death rates in the whole of China would be exponential by now rather than tailing off. It is probably less of a killer than the common flu, unless there is close contact and direct exposure. The fact that it can be spread during its' incubation period is what will lead to the virus spreading worldwide and perhaps would be unstoppable. The only solace will be its' low fatality rate.

Is China To Blame?

Viral mutation is a natural phenomenon. It could have happened anywhere. It is fortunate for us that this strain struck in China at this time! Within 7 days of notification Chinese scientist were able to sequence the genome and place the whole cities of the nation under quarantine to stop the spread of the infection nationally and globally. No country in the world could or would be willing to take such draconian measures at such huge cost to their economy. We should be thankful that China did.

We have now learned much about this virus and much will now change. China would probably ban all live wildlife markets and this time it would probably stick. Old superstitions die hard and this experience will hopefully change worldwide attitudes and give new hope to wildlife and endangered species.

As 2019-NCov will most probably remain with us from now on, our attitudes towards personal hygiene, social behavior and cleanliness will change for the better.

Economic Impact.

China is the biggest importer and consumer of crude oil in the world. When China shut the taps crude prices fell 20% immediately. This shows the demand pull on oil prices and emphasis the potential for China to influence crude prices into the future should she wish to do so. OPEC no longer control oil prices. China does. Let us hope that she refrains from implementing a China first policy.

Looking further into the future, oil is a sunset industry with renewals and electrification of transport playing a greater role each year, countries reliant on oil do not have much time left to transform their economy. Elon Musk commented that it would only take 100 X 100 miles of solar panels to power the whole of the United States and a battery bank 1 X 1 mile to do so.

With China closing down its factories for an extra weeks many factories located in other countries also needed to cut or close production because they depend on China's supply chain. It would be difficult to change this reliance and dependency.

More that 140 million Chinese tourist visit other countries each year and many countries will take a hit economically as this revenue source has been completely shut both by China and by the receiving countries. How will China tailor its outbound tourism going forward, after this crisis?

Current estimate is that the world will take a 2% GDP hit in the first quarter of this year with China hit particularly hard. How will the US react to slow or reduce purchases from China as agreed in their phase 1 agreement? To raise dollars China can always sell treasuries and this will not be good for the US as it is still running bigger deficits each year.

A compromise will be found. If anything this episode have highlighted the fact that we have to live together as one people and one world. America first, China first or any country for that matter is a recipe for disaster. There will be a global recession just around the corner and this time there will not be a China pump to bail us out. We will have to do it together.

https://www.aljazeera.com/news/2020/01/timeline-china-coronavirus-spread-200126061554884.html


https://www.youtube.com/watch?v=Ha5YUGqmWKg