COVID-19 to stimulate epidemic disease economics

By Xu Deshun
0 Comment(s)Print E-mail, March 9, 2020
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A staff member of a hot pot restaurant checks takeout food in southwest China's Chongqing municipality, Feb. 15, 2020. For the prevention and control of novel coronavirus pneumonia, some hot pot restaurants in Chongqing are providing consumers with zero-contact hot pot takeout service. [Photo/Xinhua]

The COVID-19 outbreak continues to spread around the world, with more than 98,000 people having been confirmed of infection as of March 6. The international community and organizations are working closely to fight the epidemic, and I believe that the virus will be defeated within the near future. Meanwhile, it appears that the growth of the epidemic disease economics has been quietly accelerated.

The Chinese term "epidemic disease economics" was originally coined in 2011 by a little-known scholar researching the impact of the 1918 influenza pandemic on the society and economy of the United States. Around 700,000 Americans died during this tragic period, but today people seem complacent perhaps because it happened long time ago. At the time, industries affected by the epidemic – such as healthcare, telecommunications, entertainment, life insurance, medical materials and advertising – all had to be rebuilt. Since then, the phenomena of an epidemic economics appeared in people's lives as well as academia. While humans have long been fighting harmful viruses, many scholars consider that this special form of economics have to develop gradually.

Flash forward to the present, and I have found that the epidemic disease economics is likely to soon become better known. During the COVID-19 outbreak, the virus has become the most popular topic of conversation among the public, with seemingly no person or business left unaffected in China. Furthermore, certain industries, such as online retail, online health services, online education, online gaming, as well as express deliveries and logistics, are developing rapidly in the country.

As such, I suggest that experts focus their research on the epidemic disease economics. This includes tasks such as defining it as a scientific concept; identifying research objects and content; and understanding the relationships between macro- and micro-economics, and supply and demand.

In my opinion, the epidemic disease economics stands at the intersection between the economics and sociology, and is centered around at least four aspects. First, the roles people play in production need to be re-evaluated. Living harmoniously requires doing so on person-person, person-nature, and nature-nature levels, as mankind cannot surpass the power of nature. Second, the relationships between consumers, business and government must be modified, as new constraints, labor and wages in this new era particularly affect resource scarcity and economic efficiency. Third, it is more important that the government regulates the market, and makes adjustments to fiscal and monetary policies. Fourth, new changes have now taken place in the structure of both product supply and consumer demand. 

COVID-19 outbreak has brought about obvious effects in China. First of all, people's daily lives have been affected by the strict quarantine measures put in place to contain the epidemic. Second, the tertiary industry has taken a serious hit. The operating income of tourist sites, restaurants and hotels – totaling nearly 1 trillion yuan – decreased during the Spring Festival holiday (Jan. 24 to 30). Real estate revenues also declined sharply, leading to difficulties in general budgetary revenues of Chinese regional and local governments this year. On Feb. 20, Moody's Analytics forecast that economic growth in China will slow to 5.2% this year, down from its previous forecast of 5.8% based on the assumption that normal economic activity is resumed by the beginning of the second quarter.

However, as I mentioned above, some industries have greater opportunities for development. In view of these changes, the Chinese government has been planning strategies accordingly. For example, China is accelerating its legislative process to create a biosecurity law and economic-stimulus package so as to cope with the public health crisis. 

In conclusion, I am confident that the economics related to the epidemic disease will attract stronger research interest, and the corresponding economy will be stimulated, not only in China, but also in other countries.

Dr. Xu Deshun is a research fellow at the Chinese Academy of International Trade and Economic Cooperation, Ministry of Commerce.

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