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The Hit of the Novel Coronavirus Outbreak to China's Economy

Author

Listed:
  • Hongbo Duan

    (School of Economics and Management, University of Chinese Academy of Sciences, Beijing 100190, China)

  • Qin Bao

    (Center for Forecasting Science, Chinese Academy of Sciences, Beijing 100190, China)

  • Kailan Tian

    (Faculty of Economics and Business, University of Groningen, 9700 AV Groningen, The Netherlands)

  • Shouyang Wang

    (School of Economics and Management, University of Chinese Academy of Sciences, Beijing 100190, China and Center for Forecasting Science, Chinese Academy of Sciences, Beijing 100190, China)

  • Cuihong Yang

    (School of Economics and Management, University of Chinese Academy of Sciences, Beijing 100190, China, Center for Forecasting Science, Chinese Academy of Sciences, Beijing 100190, China, and Academy of Mathematics and Systems Science, Chinese Academy of Sciences, Beijing 100190, China)

  • Zongwu Cai

    (Department of Economics, The University of Kansas, Lawrence, KS 66045, USA)

Abstract

Broke out at the end of 2019, the novel coronavirus pneumonia (COVID-19) has been spreading in over 185 countries and territories, leading to more than 1,350,000 confirmed infections and 74,000 fatalities; the dismal performance of the global stock market and the collapse of oil prices are mostly attributed to this outbreak. 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 Chinaís economic growth in 2020 by 1.2%, versus 1.9% and 0.2% for consumption and investment, respectively. The service industry suffers the most from the outbreak, and the Accommodation-Food-Beverage service, Entertainment, Wholesale-Retail Trade are identified as the most vulnerable sectors, with the negative impact on output reaching as high as 5.6%. 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

  • Hongbo Duan & Qin Bao & Kailan Tian & Shouyang Wang & Cuihong Yang & Zongwu Cai, 2020. "The Hit of the Novel Coronavirus Outbreak to China's Economy," WORKING PAPERS SERIES IN THEORETICAL AND APPLIED ECONOMICS 202008, University of Kansas, Department of Economics, revised Mar 2020.
    • Handle: RePEc:kan:wpaper:202008
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    File URL: http://www2.ku.edu/~kuwpaper/2020Papers/202008.pdf
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    Cited by:

    1. Jing Yuan & Yajing Dong & Weijie Zhai & Zongwu Cai, 2021. "Economic Policy Uncertainty: Cross-Country Linkages and Spillover Effects on Economic Development in Some Belt and Road Countries," WORKING PAPERS SERIES IN THEORETICAL AND APPLIED ECONOMICS 202110, University of Kansas, Department of Economics, revised Nov 2021.

    More about this item

    Keywords

    coronavirus pneumonia (COVID-19); Damage assement; Economic impacts; Economy recovery; Global stock market; SARS.;
    All these keywords.

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