The Coronavirus Outbreak and Globalization

The myriad ways that globalization has connected previously far-flung parts of the world can be seen in virtually every business sector, from trade, labor, and capital to technology, transportation, and the flow of ideas and information—just to name a few.

And much of that change has occurred in the years since the SARS outbreak originated in China in 2002, claiming the lives of almost 800 people while infecting more than 8,000 over nine months stretching into 2003.

The current coronavirus outbreak, which originated in Wuhan, the affluent capital of Hubei province in central China, underscores how a crisis anywhere in the world today can cause shockwaves to the public health and economic systems of nations near and far.

Odds are that if you’re like most people, you had not heard of Wuhan before the coronavirus outbreak began in December. Located at the confluence of the Yangtze and Han rivers, Wuhan has been called the “Chicago of China,” which should give you some idea of its importance as the economic, financial, trading, science and information exchange hub of Hubei province in central China.

An old industrial port, Wuhan has more than 500 factories and other facilities, placing it 13th among 2,000 Chinese cities in Bloomberg’s supply chain database, Bloomberg reported. It is perhaps best known as an auto manufacturing and logistics hub, and has experienced a boom in technology and the services sector in recent years as well.

Until Jan. 22 of this year, that is, when China took the extraordinary step of shutting down all transportation to the city, effectively quarantining its 11 million residents. As of Feb. 10, 2020, the coronavirus outbreak had already claimed the lives of more than 900 people—all but two of them in China, with another 40,000-plus infections reported in Asia. The disease had been detected in at least 24 other countries, most involving people who traveled from China, according to The New York Times.

The coronavirus outbreak is also exacting a serious economic toll in China, with some economists predicting a slowdown in GDP of .5 percent to 1 percent this quarter. And that’s provided the worst-case scenario is avoided, and the disease doesn’t continue to spread.

When Wuhan was locked down, it also severed the global supply chain for many manufacturers. As Bloomberg reported: “China is the largest exporter of intermediate manufactured goods that can be resold between industries or used to produce other things, so its problems quickly reverberate through global supply chains. Indeed, global reliance on those products doubled to 20 percent from 2005 to 2015.”

SARS and the Coronavirus Outbreak

That statistic highlights how much globalization has changed the world in the years since the SARS outbreak. It’s hard to picture just how much China has emerged from its relative isolation in the first two decades of this century. For example, CNN reported that Chinese government figures show “the number of outbound tourists increased from 16.6 million trips in 2003 to 149.7 million in 2018.”

That is likely one contributing factor to how the coronavirus has spread far more rapidly than SARS did. And why, even though the SARS virus was far more lethal (a fatality rate of 9.6 percent) than the coronavirus (an estimated 2.1 percent fatality rate), the coronavirus has already killed and infected more people in less than two months than SARS did in nine months.

It’s true that, of all the cities and provinces in China, the lockdown of Wuhan and much of Hubei Province may be the most disruptive to the global economy. We are seeing just how vulnerable we are to a crisis on the other side of the world.

Still, I believe that, on balance, the overall impact of globalization has been largely positive for the planet and its people. So it concerns me that if the coronavirus is not contained sooner rather than later, it could have a corrosive impact on international relations, providing yet another impetus to close down borders.

That would be drawing the wrong lesson from history. If anything, what is happening in Wuhan and China should be a reason for nations to work together more cooperatively on issues of mutual benefit, from public health to trade.