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China has experienced several major epidemics in the past 20 years. But only SARS seems comparable to the recent coronavirus outbreak in terms of contagiousness and the mortality rate. And while most estimates suggest that the impact of coronavirus will be smaller than SARS as a percentage of China's GDP, the absolute cost will be far greater, given China's growth over the past two decades.
SARS reduced China's GDP by 1%, or approximately 100 billion renminbi, in 2003. But at the time, China represented just 4% of global GDP. Today, China makes up more than 16% of global GDP and the estimated reduction of 0.2% to 0.5% of China's GDP from coronavirus could cost as much as 500 billion renminbi (see Figure 1 above).
SARS and epidemics like it also disproportionately affect secondary and tertiary industries. Manufacturing and services now represent a higher proportion of China's GDP (93%) than their proportion of GDP (85%) during the SARS outbreak 20 years ago (see Figure 2 above).
The authors thank Shijing Liu and Lily Shao for their contributions to this analysis.
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First published in Februar 2020