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The hit of the novel coronavirus outbreak to China's economy

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  • Duan, Hongbo
  • Bao, Qin
  • Tian, Kailan
  • Wang, Shouyang
  • Yang, Cuihong
  • Cai, Zongwu

Abstract

Broke out at the end of 2019, the novel coronavirus pneumonia (COVID-19) has been spreading throughout the world, leading to more than 87 million confirmed infections and 1.88 million fatalities. 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 China's economic growth in 2020 by 3.5%, versus 4.4% for final consumption (relative to baseline). The service industry suffers the most from the outbreak, and the Accommodation-Food-Beverage service, Wholesale-Retail Trade, and Transport-Storage-Post are identified as the most vulnerable sectors, with the negative impact on output reaching as high as 14.6%. When moving to 2021, the hit to economy shrinks to 2% (1.2–2.7%), with industry estimated to be the most affected sector instead. 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.

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  • Duan, Hongbo & Bao, Qin & Tian, Kailan & Wang, Shouyang & Yang, Cuihong & Cai, Zongwu, 2021. "The hit of the novel coronavirus outbreak to China's economy," China Economic Review, Elsevier, vol. 67(C).
    • Handle: RePEc:eee:chieco:v:67:y:2021:i:c:s1043951x21000249
    DOI: 10.1016/j.chieco.2021.101606
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    3. Feng, Chun-Chiang & Chang, Kuei-Feng & Lin, Jin-Xu & Lee, Tsung-Chen & Lin, Shih-Mo, 2022. "Toward green transition in the post Paris Agreement era: The case of Taiwan," Energy Policy, Elsevier, vol. 165(C).
    4. Ying Sun & Jin Fan & Weiguo Jia, 2023. "Will the COVID-19 Pandemic Outbreak Intensify the Resource Misallocation in China’s Food Production?," Sustainability, MDPI, vol. 15(6), pages 1-19, March.
    5. Zou, Chen & Huang, Yongchun & Ye, Zi & Pan, Anqi, 2023. "The effect of major public emergencies on technology-based SMEs: Survival crisis and relief paths," Finance Research Letters, Elsevier, vol. 55(PA).
    6. Rūta Banelienė, 2022. "Sustainable Economic Growth in the European Union under COVID-19 Conditions," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 16(1), March.
    7. Adam A. Ambroziak & Joanna Stefaniak, 2022. "The position of China in trade in services within the European Union," Oeconomia Copernicana, Institute of Economic Research, vol. 13(2), pages 335-354, June.
    8. Shenhai Huang & Chao Du & Xian Jin & Daini Zhang & Shiyan Wen & Zhijie Jia, 2023. "The Impact of Carbon Emission Trading on Renewable Energy: A Comparative Analysis Based on the CGE Model," Sustainability, MDPI, vol. 15(16), pages 1-16, August.
    9. Jiang, Shiqi & Lin, Xinyue & Qi, Lingli & Zhang, Yongqiang & Sharp, Basil, 2022. "The macro-economic and CO2 emissions impacts of COVID-19 and recovery policies in China," Economic Analysis and Policy, Elsevier, vol. 76(C), pages 981-996.
    10. Liu, Yunqiang & Liu, Sha & Ye, Deping & Tang, Hong & Wang, Fang, 2022. "Dynamic impact of negative public sentiment on agricultural product prices during COVID-19," Journal of Retailing and Consumer Services, Elsevier, vol. 64(C).
    11. Liu, Yawen & Cui, Qi & Liu, Yu & Zhang, Jinzhu & Zhou, Meifang & Ali, Tariq & Yang, Lingyu & Feng, Kuishuang & Hubacek, Klaus & Li, Xinbei, 2021. "Countermeasures against economic crisis from COVID-19 pandemic in China: An analysis of effectiveness and trade-offs," Structural Change and Economic Dynamics, Elsevier, vol. 59(C), pages 482-495.

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