How China's epidemic could hurt the world economy When shocks hit the global economy , Wall street looks to history to see what will happen next . The outbreak in China of cov i d - 19, a respiratory disease invites comparison to the last one SARS. In that outbreak in 2003, China suffered a sharp hit to its growth , f ollow ed by a strong rebound . Although cov i d - 19 has now claimed more lives than SARS, i nvestors remain optimistic that its economic effects will follow a similar path . We hope that optimism is justified. Yet the comparison makes two assumptions : in supposing that containing the virus m aps neatly onto a better economic o utlook ; and in thinking that the world still works as it did when SARS was a threat . There is an inherent tension between China's apparent success in containing the epidemic and its growth prospects . Though less lethal, covid- 19 seems more infectious than SARS. China has slowed its advance only by severely limiting people's movement and closing businesses . If the government would relax these controls too hastily, progress could st all or even go into reverse. So far, officials have err ed on the side of caution . Provinces accounting for more than 90% of Chinese exports have kept factories either shut or running at low capacity since J anuary 31, when the lunar new year holiday was due to end . It is hard to overstate the effect on the economy. Coal consumption is more than a 3rd lower than the average for this time of year . Property sales are down by more than 90% . A fter the holiday, some 200 million people usually leave their hometowns to return to work . T his year t he trains that carry migrants have been nearly empty . Cities have warned outsiders that they might face 14 - day quarantine s . 9 out of 10 companies surveyed by the American chamber of commerce in Shanghai have employees working from home . C o uri er s still zoom around on their electric motorbikes , b ut the takeaway trade is not saving restaurants because people fear eating meals prepared by strangers who may be infected. Grabbing a l atte is a risk too far . Starbucks has shut half its 4000 - plus cafes in China. The second doubt is over the relevance of SARS as a comparison . The global economy has changed since 2003 when SARS struck. China now accounts for 16% of global GDP, up from 4% back then . And it is the world's second biggest importer. So any weakness, however temporary, is felt far and wide . A factory in W uhan may provide parts to a firm elsewhere in China, which in turn supplies the factory in S tuttgart , with the final product emerging in Michigan . Just - in - time production leaves little room for delays. Many firms cannot trace all their suppliers, making it hard to predict the impact of work stoppages in China on their output, let alone on global GDP . History provides little guidance on the effects of disrupted supply chains. Because the world economy has not been organized around them for long . Some problems have already emerged. Hyundai has halted some car production in S outh Korea because parts are short. So h a s N iss a n in Japan . Facebook has stopped taking orders for its new virtual reality headset a nd N intendo has delayed shipments of new gaming devices . Foxconn, which makes smart - phones for apple a nd Huawei, has restarted its factories, but with skeletal staffing . C ompanies that think they are isolated from China could be in for a surprise . It is also possible that the virus spreads rapidly outside China. Infections in developing countries may be going undetected . Vietnam has quarantined 10 , 000 people, but most governments could not enact the measures that China is using to slow the disease. So cov i d - 19 could yet become a pandemic . Wall S treet’ s optimism, in other words, is premature. If economists have a bias, it is to focus on things that are measurable and quantif iable. A t last , the cov id- 19 outbreak brings many risks that are not .