While America and Europe were twiddling their thumbs
Here’s the South China Morning Post:
“We have analysed the infections trend. So far, the daily infections in places other than Hubei have almost gone down to zero since late February,” Zhang told the official People’s Daily.
“According to our analysis of the statistics, we expect cities other than Wuhan in Hubei province will be basically free of [new] coronavirus patients in the middle of March. The hope is that Wuhan won’t have daily new cases in late March.”
Zhang, who is also director of the Tianjin University of Traditional Chinese Medicine, said people in other parts of China might be able to remove their masks in April, but that did not mean the coronavirus would be completely gone and there could still be cases, including among people arriving from overseas.
This may be overly optimistic. But these same “overly optimistic” Chinese officials predicted in early February that the epidemic would slow later in the month, and they were right. So I wouldn’t just ignore their current claims.
The Chinese initially tried to cover up the epidemic in December, and that allowed it to get out of control in Wuhan. But in some ways the response in America and Europe was even more inexcusable. Unlike the Chinese, we had several months to plan and then launch an all out effort to address the problem with very aggressive testing of the population to spot outbreaks. And yet both the US and Italian governments seemed unprepared for the outbreak when it finally occurred.
And why is there still a travel ban from China, when the US is now far more at risk from tourists from Europe? I’d guess it’s the same reason we obsess about East Asian trade surpluses, but not the even bigger European trade surpluses.
If Europe and the US fall into recession we should not blame China. Indeed, many analysts expect the Chinese economy to be almost back to normal by mid-April. Instead, we need to look in the mirror.
PS. Bloomberg’s headline writer says the epidemic shows we need big government. FYI, Italy has one of the developed world’s biggest governments as a share of GDP, and may go bankrupt soon, while Singapore and Taiwan have some of the world’s smallest governments and seem to be controlling the epidemic much more effectively. (I say headline writer, because reporters generally don’t write the headline, and Noah Smith quite rightly focuses most of his essay on government competence, not size. That’s the real issue.)
PPS. Chinese stocks recently hit a two-year high.
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6. March 2020 at 13:07
I tend to agree.
So your initial hypothesis that China was the single worst country for the coronavirus outbreak to occur is still intact or not?
A critical phase may come when the Chinese lift the quarantine measures.
The WHO now says that covid-19, unlike influenza, can be contained. But the given reasons why covid-19 should be so much more containable than influenza are not quite plausible. There seems to be a lot of wishful thinking involved.
Regarding big government: Test kits in the US wouldn’t be such a problem if the state authorities hadn’t hindered private companies with their endless regulations and requirements. US bureaucracy can’t be as small and helpless as Noah Smith says if you consider how they have their fingers in every pie.
6. March 2020 at 15:43
Besides what Christian List says about Sumners changing the goal posts, I will add that new cases in China, as tracked by the John Hopkins website, went up on 2/6/20 from the day before. Until new cases to go zero, it’s not clear that Covid-19 has been licked.
6. March 2020 at 15:43
So the last country to get it is the dumbest? Only if it gets the most. If you are right about China , which I hope you are, then we will get the least. Last and least. I don’t recall you suggesting Europe and US should have been “aggressively” testing in late January and early Feb. Testing who? I do recall reading —-don’t think you wrote this— we should not have stopped flights from China. We are also banning flights from Seoul. Milan is banning flights. (My entity is long China stocks. Not cause we are smart but because they were going up :-))
6. March 2020 at 17:31
@Christian List
Taiwan and Singapore seem to be doing a good job of containing Covid-19 without shutting their economies down. I would suspect that those two countries are why the WHO is still saying that this can be contained. If every developed and middle income country can just follow Singapore’s and Taiwan’s example, Covid-19 shouldn’t circulate all that widely in the developed world and in middle income countries. Then developed nations need to provide funding to support low income countries to do the same, which has happened before with the Ebola virus back in 2014.
It might not bring global cases to zero, but at the very least it would greatly slow the spread of the virus, and buy a lot of time to work on vaccines, researching anti-virals, beefing up training and preparedness of healthcare providers, etc.
6. March 2020 at 19:32
Michael, You asked:
“Testing who?”
How about me, for instance? I went to the doctor in early February with a bad cold, why not test me?
6. March 2020 at 20:59
Scott,
You said: “Why do we still have a travel ban with China?”, because while the number of cases is going down, we still don’t know much about the virus or where it originated. Makes perfect sense to be safe than sorry. China still has 22000+ active cases, and they don’t know who patient zero is, so we should have a travel ban with them. Russia immediately instituted a ban and shares a border with China: Only 13 cases! And they are profiling the Chinese workers in Russia to prevent any further spread! We should have banned the Chinese earlier.
As for a US recession, is that really going to happen? Atlantafed says that US economy will be growing 3.1% in the first quarter, and their numbers have been growing more and more accurated every year. I think now they predict growth better than most of the big banks.
https://www.frbatlanta.org/cqer/research/gdpnow/archives.aspx
With respect to the Chinese economy, I disagree. There are permanent output drops as a result of the coronavirus and shutdown, that are supply based, and are going to weigh that economy down. I’m sticking with my prediction of a slowdown in Chinese growth to 4% in three years. By the end of the decade, China slows down to below US growth.
6. March 2020 at 21:11
Also given active cases and spreads, it seems still like China is at more risk for Americans than Europe. Indeed, most of the “Europeans” that have gotten Coronavirus were illegal Chinese people/other migrants, and the outbreak is due to their underground nature. But that will now change as these countries begin cracking down on these communities and testing them.
https://thediplomat.com/2020/03/amid-coronavirus-concerns-taiwan-takes-measures-to-restrict-travel-from-china/
Also Taiwan agrees with me, restricting travel with China down 92%, while taking a more lax view of Europe.
7. March 2020 at 00:28
@John Arthur: there’s no possible way that 3.1% figure from the Atlanta Fed is taking into account this virus related slowdown. It’s going to make a dent. The only questions are how big and for how long.
7. March 2020 at 07:05
Msgkings
If it was it would have hit consumer spending or job numbers as a supply shock. Nope, there is no US slowdown. This makes sense, countries aren’t really as dependent as people would make it seem. China gargantuan growth didnt really surge Europe or Americas growth rate. Most economic growth is internal nowadays. I think Scott talked about a saving shock, which may be staving off recession.
The real problem with the stock market is Multinational firms taking a huge hit + fears that the virus might spread into the US, which is a real risk.
7. March 2020 at 07:29
P. Burgos,
“Taiwan and Singapore seem to be doing a good job of containing Covid-19 without shutting their economies down. I would suspect that those two countries are why the WHO is still saying that this can be contained. If every developed and middle income country can just follow Singapore’s and Taiwan’s example, Covid-19 shouldn’t circulate all that widely in the developed world and in middle income countries. ”
This is the key insight, yes. And even South Korea that had a massive case explosion not unlike Italy, has had success in containment (see the case graph tapering here https://en.wikipedia.org/wiki/2020_coronavirus_outbreak_in_South_Korea) simply through aggressive ramping up of testing https://www.bloomberg.com/news/articles/2020-03-04/south-korea-tests-hundreds-of-thousands-to-fight-virus-outbreak . Apparently S Korea fast tracked the approval for test kits (after the SARS experience) and therefore quickly had multiple domestic manufacturers producing test kits.
7. March 2020 at 13:13
Michael, You said:
“I don’t recall you suggesting Europe and US should have been “aggressively” testing in late January and early Feb.”
LOL. So now I’m supposed to give advice on both monetary policy and public health? Don’t we have any experts on public health? I thought Trump said we were the best prepared country on Earth.
John, European travelers are now spreading the coronavirus all over the world. The main problem in China today is people from Europe and elsewhere bringing the virus in. Outside of Wuhan, there’s almost no community transmission.
And just to be clear, I’m not predicting recession, I’m saying there’s an elevated risk. I have no idea how bad the epidemic will be here, and without knowing that I cannot predict the effects.
7. March 2020 at 15:02
@John Arthur:
There are things being cancelled all over the US as we speak. They just cancelled South by Southwest in Austin. Concerts, conventions, flights, cruises, all sorts of gatherings are being cancelled. Workers are told to stay home if they can. I heard Stanford will cancel classes for the rest of March.
There is going to be an economic effect in the US.
7. March 2020 at 16:35
ssumner:
“why is there still a travel ban from China, when the US is now far more at risk from tourists from Europe?”
To be fair, China quite likely still has the highest number of infections; but the overwhelming majority of them aren’t even allowed to leave their own city, much less China.
Also, the US almost certainly has more infections than any European country besides Italy (perhaps a little fewer than the entirety of non-Italian Europe combined), so it’s Europe who should be afraid of Americans.