IDEAS home Printed from https://ideas.repec.org/a/eee/chieco/v67y2021ics1043951x21000249.html
   My bibliography  Save this article

The hit of the novel coronavirus outbreak to China's economy

Author

Listed:
  • Duan, Hongbo
  • Bao, Qin
  • Tian, Kailan
  • Wang, Shouyang
  • Yang, Cuihong
  • Cai, Zongwu

Abstract

Broke out at the end of 2019, the novel coronavirus pneumonia (COVID-19) has been spreading throughout the world, leading to more than 87 million confirmed infections and 1.88 million fatalities. Motivated by this, we evaluate the economic impacts of COVID-19 outbreak on both national and industrial levels by employing quarterly computable general equilibrium (CGE) model. Our results reveal that the epidemic may lower China's economic growth in 2020 by 3.5%, versus 4.4% for final consumption (relative to baseline). The service industry suffers the most from the outbreak, and the Accommodation-Food-Beverage service, Wholesale-Retail Trade, and Transport-Storage-Post are identified as the most vulnerable sectors, with the negative impact on output reaching as high as 14.6%. When moving to 2021, the hit to economy shrinks to 2% (1.2–2.7%), with industry estimated to be the most affected sector instead. This study indicates that implementing effective measures for preventing and controlling the epidemic and policies for post-disease economic recovery play critical role in curbing the potential economic damage.

Suggested Citation

  • Duan, Hongbo & Bao, Qin & Tian, Kailan & Wang, Shouyang & Yang, Cuihong & Cai, Zongwu, 2021. "The hit of the novel coronavirus outbreak to China's economy," China Economic Review, Elsevier, vol. 67(C).
    • Handle: RePEc:eee:chieco:v:67:y:2021:i:c:s1043951x21000249
    DOI: 10.1016/j.chieco.2021.101606
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1043951X21000249
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.chieco.2021.101606?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. John E. Ataguba, 2020. "COVID-19 Pandemic, a War to be Won: Understanding its Economic Implications for Africa," Applied Health Economics and Health Policy, Springer, vol. 18(3), pages 325-328, June.
    2. Bao, Qin & Tang, Ling & Zhang, ZhongXiang & Wang, Shouyang, 2013. "Impacts of border carbon adjustments on China's sectoral emissions: Simulations with a dynamic computable general equilibrium model," China Economic Review, Elsevier, vol. 24(C), pages 77-94.
    3. Pichler, Stefan & Ziebarth, Nicolas R., 2017. "The pros and cons of sick pay schemes: Testing for contagious presenteeism and noncontagious absenteeism behavior," Journal of Public Economics, Elsevier, vol. 156(C), pages 14-33.
    4. Fang, Hanming & Wang, Long & Yang, Yang, 2020. "Human mobility restrictions and the spread of the Novel Coronavirus (2019-nCoV) in China," Journal of Public Economics, Elsevier, vol. 191(C).
    5. Alan Siu & Y. C. Richard Wong, 2004. "Economic Impact of SARS: The Case of Hong Kong," Asian Economic Papers, MIT Press, vol. 3(1), pages 62-83.
    6. Yang, Yang & Zhang, Hongru & Chen, Xiang, 2020. "Coronavirus pandemic and tourism: Dynamic stochastic general equilibrium modeling of infectious disease outbreak," Annals of Tourism Research, Elsevier, vol. 83(C).
    7. Keogh-Brown, Marcus Richard & Smith, Richard David, 2008. "The economic impact of SARS: How does the reality match the predictions?," Health Policy, Elsevier, vol. 88(1), pages 110-120, October.
    8. Geoffard, Pierre-Yves & Philipson, Tomas, 1996. "Rational Epidemics and Their Public Control," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 37(3), pages 603-624, August.
    9. Ivanov, Dmitry, 2020. "Predicting the impacts of epidemic outbreaks on global supply chains: A simulation-based analysis on the coronavirus outbreak (COVID-19/SARS-CoV-2) case," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 136(C).
    10. Hongbo Duan & Shouyang Wang & Cuihong Yang, 2020. "Coronavirus: limit short-term economic damage," Nature, Nature, vol. 578(7796), pages 515-515, February.
    11. Smriti Mallapaty, 2020. "Scientists fear coronavirus spread in countries least able to contain it," Nature, Nature, vol. 578(7795), pages 348-348, February.
    12. Antoszewski, Michał, 2019. "Wide-range estimation of various substitution elasticities for CES production functions at the sectoral level," Energy Economics, Elsevier, vol. 83(C), pages 272-289.
    13. Wen Hai & Zhong Zhao & Jian Wang & Zhen-Gang Hou, 2004. "The Short-Term Impact of SARS on the Chinese Economy," Asian Economic Papers, MIT Press, vol. 3(1), pages 57-61.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Chen, Xi & Qiu, Yun & Shi, Wei & Yu, Pei, 2022. "Key links in network interactions: Assessing route-specific travel restrictions in China during the Covid-19 pandemic," China Economic Review, Elsevier, vol. 73(C).
    2. Feng, Chun-Chiang & Chang, Kuei-Feng & Lin, Jin-Xu & Lee, Tsung-Chen & Lin, Shih-Mo, 2022. "Toward green transition in the post Paris Agreement era: The case of Taiwan," Energy Policy, Elsevier, vol. 165(C).
    3. Zou, Chen & Huang, Yongchun & Ye, Zi & Pan, Anqi, 2023. "The effect of major public emergencies on technology-based SMEs: Survival crisis and relief paths," Finance Research Letters, Elsevier, vol. 55(PA).
    4. Rūta Banelienė, 2022. "Sustainable Economic Growth in the European Union under COVID-19 Conditions," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 16(1), March.
    5. Liu, Yunqiang & Liu, Sha & Ye, Deping & Tang, Hong & Wang, Fang, 2022. "Dynamic impact of negative public sentiment on agricultural product prices during COVID-19," Journal of Retailing and Consumer Services, Elsevier, vol. 64(C).
    6. Liu, Yawen & Cui, Qi & Liu, Yu & Zhang, Jinzhu & Zhou, Meifang & Ali, Tariq & Yang, Lingyu & Feng, Kuishuang & Hubacek, Klaus & Li, Xinbei, 2021. "Countermeasures against economic crisis from COVID-19 pandemic in China: An analysis of effectiveness and trade-offs," Structural Change and Economic Dynamics, Elsevier, vol. 59(C), pages 482-495.
    7. Jia, Zhijie & Wu, Rongxin & Liu, Yu & Wen, Shiyan & Lin, Boqiang, 2024. "Can carbon tariffs based on domestic embedded carbon emissions reduce more carbon leakages?," Ecological Economics, Elsevier, vol. 220(C).
    8. Wang, Xueli & Wang, Lei & Zhang, Xuerong & Fan, Fei, 2022. "The spatiotemporal evolution of COVID-19 in China and its impact on urban economic resilience," China Economic Review, Elsevier, vol. 74(C).
    9. Ying Sun & Jin Fan & Weiguo Jia, 2023. "Will the COVID-19 Pandemic Outbreak Intensify the Resource Misallocation in China’s Food Production?," Sustainability, MDPI, vol. 15(6), pages 1-19, March.
    10. Adam A. Ambroziak & Joanna Stefaniak, 2022. "The position of China in trade in services within the European Union," Oeconomia Copernicana, Institute of Economic Research, vol. 13(2), pages 335-354, June.
    11. Shenhai Huang & Chao Du & Xian Jin & Daini Zhang & Shiyan Wen & Zhijie Jia, 2023. "The Impact of Carbon Emission Trading on Renewable Energy: A Comparative Analysis Based on the CGE Model," Sustainability, MDPI, vol. 15(16), pages 1-16, August.
    12. Stetsiv, Iryna, 2024. "International experience in applying and developing the economic mechanism of public administration of food security," Agricultural and Resource Economics: International Scientific E-Journal, Agricultural and Resource Economics: International Scientific E-Journal, vol. 10(1), March.
    13. Jiang, Shiqi & Lin, Xinyue & Qi, Lingli & Zhang, Yongqiang & Sharp, Basil, 2022. "The macro-economic and CO2 emissions impacts of COVID-19 and recovery policies in China," Economic Analysis and Policy, Elsevier, vol. 76(C), pages 981-996.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yu, Zhen & Li, Yuankun & Xie, Xubin, 2021. "Long-term trade impact of epidemic outbreaks: Is it V-shaped?," Economic Analysis and Policy, Elsevier, vol. 71(C), pages 16-40.
    2. Peter A.G. van Bergeijk, 2021. "Pandemic Economics," Books, Edward Elgar Publishing, number 20401.
    3. Fang, Guanfu & Feng, Jin, 2021. "Is the 2003 SARS epidemic over? Long-term effects of epidemic exposure on mortality among older adults," China Economic Review, Elsevier, vol. 67(C).
    4. Fang, Da & Guo, Yan, 2022. "Flow of goods to the shock of COVID-19 and toll-free highway policy: Evidence from logistics data in China," Research in Transportation Economics, Elsevier, vol. 93(C).
    5. Anirudh Shingal & Prachi Agarwal, 2020. "How did trade in GVC-based products respond to previous health shocks? Lessons for COVID-19," RSCAS Working Papers 2020/68, European University Institute.
    6. repec:cnb:ocpubc:geo2020/4 is not listed on IDEAS
    7. Olli-Pekka Hilmola & Oskari Lähdeaho & Ville Henttu & Per Hilletofth, 2020. "Covid-19 Pandemic: Early Implications for North European Manufacturing and Logistics," Sustainability, MDPI, vol. 12(20), pages 1-13, October.
    8. Ján Palguta & René Levínský & Samuel Škoda, 2022. "Do elections accelerate the COVID-19 pandemic?," Journal of Population Economics, Springer;European Society for Population Economics, vol. 35(1), pages 197-240, January.
    9. Jean-François Hoarau, 2020. "Is international tourism responsible for the pandemic of COVID-19? A very preliminary assessment with a special focus on small islands," Economics Bulletin, AccessEcon, vol. 40(3), pages 2395-2407.
    10. Lina Zhong & Sunny Sun & Rob Law & Xiaonan Li & Liyu Yang, 2022. "Perception, Reaction, and Future Development of the Influence of COVID-19 on the Hospitality and Tourism Industry in China," IJERPH, MDPI, vol. 19(2), pages 1-19, January.
    11. Jean-François Hoarau, 2020. "Is international tourism responsible for the pandemic of COVID-19? A preliminary cross-country analysis with a special focus on small islands," TEPP Working Paper 2020-04, TEPP.
    12. Yun Qiu & Xi Chen & Wei Shi, 2020. "Impacts of social and economic factors on the transmission of coronavirus disease 2019 (COVID-19) in China," Journal of Population Economics, Springer;European Society for Population Economics, vol. 33(4), pages 1127-1172, October.
    13. Victor Aguirregabiria & Jiaying Gu & Yao Luo & Pedro Mira, 2020. "A Dynamic Structural Model of Virus Diffusion and Network Production: A First Report," Working Papers tecipa-665, University of Toronto, Department of Economics.
    14. Konstantinos Gkillas & Christoforos Konstantatos & Costas Siriopoulos, 2021. "Uncertainty Due to Infectious Diseases and Stock–Bond Correlation," Econometrics, MDPI, vol. 9(2), pages 1-18, April.
    15. Li, Tao & Rong, Lili & Zhang, Anming, 2021. "Assessing regional risk of COVID-19 infection from Wuhan via high-speed rail," Transport Policy, Elsevier, vol. 106(C), pages 226-238.
    16. Margarida Rodrigues & Mário Franco & Nuno Sousa & Rui Silva, 2021. "Reviewing COVID-19 Literature on Business Management: What It Portends for Future Research?," Sustainability, MDPI, vol. 13(11), pages 1-21, May.
    17. Md. Mokhlesur Rahman & Jean-Claude Thill & Kamal Chandra Paul, 2020. "COVID-19 Pandemic Severity, Lockdown Regimes, and People’s Mobility: Early Evidence from 88 Countries," Sustainability, MDPI, vol. 12(21), pages 1-17, November.
    18. Bisin, Alberto & Moro, Andrea, 2022. "JUE insight: Learning epidemiology by doing: The empirical implications of a Spatial-SIR model with behavioral responses," Journal of Urban Economics, Elsevier, vol. 127(C).
    19. Mendolia, Silvia & Stavrunova, Olena & Yerokhin, Oleg, 2021. "Determinants of the community mobility during the COVID-19 epidemic: The role of government regulations and information," Journal of Economic Behavior & Organization, Elsevier, vol. 184(C), pages 199-231.
    20. Verikios, George, 2017. "The Importance of Periodicity in Modelling Infectious Disease Outbreaks," Conference papers 332907, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    21. McKibbin, Warwick & Fernando, Roshen, 2023. "The global economic impacts of the COVID-19 pandemic," Economic Modelling, Elsevier, vol. 129(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:chieco:v:67:y:2021:i:c:s1043951x21000249. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/chieco .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.