The Economist - USA (2020-02-15)

The EconomistFebruary 15th 2020 International 39

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The disease has killed over 1,300 people

and infected around 60,000 in China

(there is great uncertainty over the totals).

It seems to be transmitted through droplets

from coughs and sneezes, and mostly as a

result of close contact with someone who

is already ill. But experts fear that some

people with no symptoms could infect oth-

ers. Tracing the contacts of those who have

been infected is like “looking through the

dark”, says Oshitani Hitoshi, an expert in

infectious diseases at Tohoku University in

Japan. Rich countries such as Singapore are

particularly well placed to monitor and

care for those who are ill and people in con-

tact with them. But poorer countries with

weaker health systems will struggle.

Singapore has prepared for an outbreak

of this kind since sars caught Asia un-

awares in 2003. The country has raised its

outbreak alert to orange, the second-high-

est threat level. It has barred those who

have been to China in the past 14 days from

entering the country. Quarantine awaits

anyone who has been in close contact with

an infected individual. And people enter-

ing hospitals and offices must have their

temperature taken first. Inter-school

sports fixtures have been cancelled until

the end of March. The largest dormitory for

migrant workers in the country stands

ready if any of its occupants need to be

quarantined. Pink pillows lie on single

beds, empty so far, widely spaced to ensure

that any patients are more than two metres

apart in designated rooms. Singapore is us-

ing a tough new law against fake news to

try to prevent the spread of inaccurate in-

formation, such as a rumour that the coun-

try has run out of face masks.

Japan is taking many similar steps. The

government is scared that the virus might

wreck the Olympic Games in Tokyo this

summer. Earlier this month it banned for-

eigners who had visited Hubei, the prov-

ince in China where the outbreak originat-

ed, and those with passports issued there,

from entering Japan. The country’s two big-

gest airlines have stopped all flights to Bei-

jing from one of Tokyo’s international air-

ports and halved their flights from another.

So far India has detected cases only in

Kerala. This may be because Kerala is the

Indian state with the strongest health-care

system, so cases there are more likely to be

detected. Infections elsewhere may simply

not have been noticed yet. However, India’s

government has been quick to react. It was

among the first countries to evacuate its

citizens from Wuhan and is monitoring al-

most 10,000 people for covid-19. Also, India

is less well connected to China than air

hubs such as Singapore and Thailand, and

its relative isolation may protect it some-

what. Indeed, it has sent medical equip-

ment including masks and protective

clothing to China. The government has,

however, also claimed that ayurvedic rem-

edies and homeopathy could help manage

the disease, suggestions for which evi-

dence is entirely lacking. Meanwhile Paki-

stan has told its citizens in Wuhan to stay

put. Its health system is already strained

and China is one of its most vital allies.

All countries must balance their fear of

the human and economic costs of the virus

against the damage caused by measures to

contain it. For less well-off countries, the

trade-off is especially painful. Tourism

generates more than a tenth of Thailand’s

gdp. In 2018 about a quarter of the 38m

holidaymakers who visited the country

were Chinese. In desperation, Thailand has

neither restricted Chinese tourists from

entering the country nor stopped giving

them free visas on arrival.

“We wish to reaffirm our solidarity with

the people of China and wish you every

success in overcoming this grave situa-

tion,” wrote King Maha Vajiralongkorn in a

message to China’s leader, Xi Jinping. Hun

Sen, the president of Cambodia, where Chi-

na has invested more money than any oth-

er country in recent years, went further. He

travelled to Beijing to meet Mr Xi, demon-

strating his loyalty in the face of adversity.

China’s embassies have attacked for-

eign governments for imposing travel

bans. Its ambassador in Jakarta warned In-

donesia that “overreaction” would have “a

direct impact” on relations. But such bully-

ing may not work. Covid-19 comes after a

devastating outbreak of African swine flu

on Chinese pig farms and amid a trade war

between China and America, and pro-

tracted protests in Hong Kong. These up-

heavals have dented China’s reputation in

the region. The epidemic has exposed Chi-

na as a country of great strengths and weak-

nesses, says Bilahari Kausikan, a Singapor-

ean former diplomat: “Quite a lot of the

gloss has worn off the Chinese story.” 7

Managing expectations

Source:DeSalazar& Niehusetal., 2020 *OnFeb4th 2020

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Britain

France

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Malaysia

Germany US

Australia

S.Korea HongKong

Singapore

Japan

Canada

Indonesia

DailypassengersfromWuhan

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↖thanMoreexpectedcases byauthors’model

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T

o glimpse theimpact of the new coro-

navirus on global businesses, consider

Apple. Such is the American tech titan’s re-

liance on the Chinese mainland for parts

and assembly that United Airlines typically

shuttles some 50 of its executives between

California and China each day. But not at

the moment. United and other carriers

have suspended flights to and from China.

A lack of workers meant that after the end

of the lunar new-year holiday Foxconn,

which makes most of Apple’s iPhones in

China, could not get its assembly plants

back to full capacity this week. Analysts

reckon that the virus could lead to Apple

shipping 5-10% fewer iPhones this quarter

and could scupper its plans to ramp up pro-

duction of its popular AirPods.

As covid-19 spreads, its effect on busi-

ness is amplified. Tourism into and out of

the mainland has plunged. Some 400,000

Chinese tourists are forecast to cancel trips

to Japan by the end of March. One large

cruise ship in Asia was turned away by five

countries because scores on board are in-

fected (Cambodia at last allowed it to dock).

The Singapore Air Show earned the city-

state some $250m in 2018, but far less this

week owing to cancellations by 70 compa-

nies including Lockheed Martin, an Ameri-

can defence giant. The Mobile World Con-

gress, a giant telecoms conference due to

take place in Barcelona this month, has

been cancelled after companies from Voda-

fone and bt to Facebook and Amazon

pulled out. It is increasingly clear that the

virus could damage global supply chains,

costing the world’s economy dearly.

Most multinational firms have been

caught by surprise. This is not the first time

they have suffered shocks to their Asian

supply chains. The tsunami that hit Japan

in 2011 and devastating floods in Thailand

the same year disrupted production for

many big firms. More recently, Donald

Trump’s trade war with China has exposed

the risks of supply chains that rely too

heavily on the mainland. But the bosses of

such businesses have done little to prepare

for shocks such as that inflicted by the out-

NEW YORK, PARIS, SHANGHAI AND TOKYO

The new coronavirus could have a lasting impact on global supply chains

Covid-19 and trade

A deadly disease disrupts