Bain uses cookies to improve functionality and performance of this site. More information can be found in our Privacy Policy. By continuing to browse this site, you consent to the use of cookies.

Snap Chart

How Much Will Coronavirus Hurt China's Economy?

The recent outbreak of the highly contagious and deadly coronavirus is expected to cost more than any previous epidemic.

  • February 08, 2020

Snap Chart

How Much Will Coronavirus Hurt China's Economy?

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.

Read more

Beyond the Coronavirus Crisis: Prepare Now

The cost of novel coronavirus pneumonia will surpass all previous outbreaks. But companies that act now can minimize the worst effects and emerge from the crisis stronger.

Tags

Ready to talk?

We work with ambitious leaders who want to define the future, not hide from it. Together, we achieve extraordinary outcomes.