The coronavirus outbreak that has killed 81 people in China — mostly in the central city of Wuhan and the surrounding Hubei province — is likely already having an effect on Canada and B.C.’s economy, economists say.
The outbreak, which Chinese officials said appears to be accelerating this week after first hitting global headlines in mid-January, has already rendered almost 3,000 people ill and resulted in confirmed or suspected cases here in Canada as well as in places such as the United States, Japan, South Korea, Taiwan and Southeast Asia.
Andreas Schotter, associate professor of international business at the Ivey Business School at Western Ontario, is a former expatriate executive in the Chinese market and has close ties to the East Asia region. Schotter, who was in Hong Kong earlier in January and is scheduled for a stopover in Singapore next week, said one encouraging sign is that Beijing appears to be handling the outbreak head-on (with aggressive quarantines in Wuhan and Hubei) rather than suppressing information on reported cases for months during the SARS outbreak in 2003.
“I actually witnessed [the SARS outbreak] firsthand during my residency in Hong Kong,” Schotter said of the 2003 event that killed 774 people in 17 countries with a fatality rate of almost 10 per cent. “…The situation is very fluid right now, but the good news is that this crisis seems to be handled very differently from the SARS outbreak some 17 years ago. I am confident that this virus will be handled with outmost professionalisms — albeit with the fact that we will likely see more spread globally.”
At Ivey, Schotter said the school is taking the safe-the-sorry approach by diverting exchange students and study trips away from the affected regions of China for this term. He added that there does not appear to be any major concerns on campus among the students or faculty, as the term has been in full swing since the first week of January — and no new students are expected to arrive in the near future.
But the fluidity of the situation is something everyone should be mindful of, Schotter added.
“Just 10 days ago, it was not an issue; however, this has changed,” he said. “We are monitoring this on a daily basis now… we are advising students to be vigilant.”
Schotter also added that the outbreak will have an unquestionable impact on the economy both in China and globally, since the cases happened in the midst of the Lunar New Year holiday season — China’s biggest wave of travel, retail consumption and restaurant attendance annually. The resulting malaise on a usually vibrant economic period will undoubtedly dent figures for travel and consumption, but the scale is not yet clear, Schotter noted.
“We will learn more about the supply chain effects once the Chinese New Year holidays have passed,” he said. “Shanghai has already extended the holiday period; and if Gungdong will do so too, there might be broader effects across numerous industries. And yes, here will be an impact on tourism and the related retail and restaurant consumption, particularly in Vancouver and Toronto.
“In case of a more widespread outbreak in Canada, this will also cause local residents to avoid restaurants more,” Schotter added.