What If the Coronavirus and China's Quarantines Caused a Global Recession?

January 31, 2020 Topic: Economics Region: World Blog Brand: The Buzz Tags: CoronavirusRecessionChinaQuarantineWuhan

What If the Coronavirus and China's Quarantines Caused a Global Recession?

That would be bad.

Elsewhere in Asia

China's numerous land borders in Northeast and Central Asia also put other countries at risk of the virus, leading Mongolia and Kazakhstan to implement severe restrictions on movement from China. However, most countries have to balance the need to protect their populations against the economic and political ramifications of severing links with China. Particularly worried is North Korea, which has banned Chinese tourist arrivals and set up quarantine zone at its borders. While North Korea's tight, authoritarian system appeared to help it weather both the 2002-2003 SARS outbreak and the 2015 MERS outbreak, the new coronavirus presents the country with more of a dilemma, as Chinese tourists (350,000 visited last year alone) have become a critical source of revenue for the country's economy as it struggles under the weight of sanctions. Another source of danger for Pyongyang are the estimated 50,000 North Korean workers in China. The laborers were supposed to return to North Korea by late last month in accordance with U.N. sanctions, but many reportedly did not due to the haphazard implementation of the measures. Since then, however, some may have returned home before Pyongyang implemented quarantine measures, particularly in the run-up to the Lunar New Year. 

The Upshot 

China's coronavirus outbreak is a fluid, rapidly evolving situation. What happens now is highly uncertain — and even more so for countries that are trying to contain the spread of the virus within their own borders. If China's domestic response nips the virus in the bud, the number of cases could peak in the coming weeks, resulting in a relaxing of restrictions within the next two months. But if the measures prove ineffective and the virus spreads further — or becomes more fatal — the long period of incubation and contagiousness could mean cases continue to crop up internationally for some time to come. In such a scenario, authorities in China and farther afield won't be lifting restrictions anytime soon, which would herald a difficult year ahead for the global tourism industry.

The Coronavirus Outbreak Could Leave Global Tourism and Trade Ailing is republished with the permission of Stratfor Worldview, a geopolitical intelligence and advisory firm.

Image: Reuters.