The first cases of unusual pneumonia were reported in Wuhan, a port city of 11 million people in the central Hubei province of China on December 31, 2019. China claimed to have alerted the World Health Organization (WHO) about this unknown virus which was later termed as 2019-nCoV on January 7, 2020. China announced its first death from COVID-19 on January 11. A second death in Wuhan was announced on January 17. Later, over the following days, news of confirmed cases of Coronavirus started coming from Thailand, Japan, South Korea, Vietnam, Taiwan, France, Australia, Malaysia, Singapore, Iran, Italy, the United States, the Middle East and host of other countries and regions. The WHO declared it a pandemic on March 11, 2020. Currently, the disease has spread across the world, affecting over 132,000 people in 123 countries and more than 4,900 deaths. China believes the peak of the COVID-19 outbreak in Wuhan and China has passed and they are now busy in containing the ‘imported’ cases. China expects that with $3 trillion in foreign reserves the country will not have a problem achieving a 6 percent GDP growth in 2020.
The situation in rest of the world has turned alarming as COVID-19 has spread across all major countries. The US has declared national emergency as coronavirus crisis appears to have deepened. It won’t be wrong to say that COVID-19 has halted the entire world. People living in world’s busiest cities have locked themselves up in their homes. The normal life has come to a standstill. The worst part is that no one really knows if, how and when the ghost of COVID-19 will be halted.
A significant economic downturn across the world is inevitable. The challenge is to get through the next few months. The US central bank cut its benchmark interest rate by 50 basis points on March 3 and again by 100-basis-point on March 15. Other central banks around the world are expected to follow. China’s central bank is also under pressure to reduce its benchmark interest rate in view of China’s economic downturn. In addition, massive stimulus packages have been announced by the US, UK, Italy, Australia to try to stave off a recession.
According to a recent Harvard Business Review analysis of high-frequency data on proxies for the movement of people and goods, production, and confidence, China appears to be in the early stages of an economic rebound only six weeks after the initial virus outbreak. Many Chinese companies have already moved beyond crisis response to recovery and post-recovery planning. Businesses, governments and international authorities in Europe and the U.S. are scrambling to mobilize responses to deal with the Covid-19 crisis as it spreads to new epicentres there. Clearly each local situation is different, but there are opportunities for them to learn from different regions in China that are weeks ahead in responding to the epidemic.
It is impossible to gauge the impact of the unfolding COVID-19 crisis. Any forecast will be dubious when the virus trajectory is unknowable, as are the effectiveness of its containment efforts, and consumers’ and firms’ assessments or reactions. There is no single number that credibly captures or foresees Covid-19’s economic, social and political impact. The Covid-19 outbreak is affecting supply chains and disrupting manufacturing operations around the world forcing companies to temporarily shut assembly and production plants in the U.S. & Europe. The activity of Chinese plants has fallen in the past month and is expected to remain depressed for months.
The virus puts to the test various governments’ ability to effectively protect their populations. Weak or inefficient leaders and brittle institutions could be exposed, and political shifts triggered. Depending on its duration and severity, Covid-19 could even shape the future of people’s vision, lifestyle, well-being and attitude towards globalization.