Coronavirus, Explained, For Folks Who Don't Have Chinese Colleagues
Deviating slightly from my normal nerd-talk to discuss the prominent global headline of the day.
Many of the folks I know here in the States don’t seem to grasp the real impacts of the COVID-19 outbreak, and the corresponding response by the Chinese government. This is an understandable oversight: most of the people in my life who aren’t coworkers don’t have any exposure to Asia, and Chinese colleagues, as a part of their working lives. I work for a consumer company that builds products in China. Coronavirus rules my life right now.
The real story behind coronavirus isn’t that we’re all going to get sick and die. The real story behind coronavirus is that about 10% of the world’s workforce is currently not at work.
That’s not to say that coronavirus isn’t dangerous. COVID-19 is a public health crisis, and a mishandled one at that. (Max Fisher from the New York Times explains why, in typically brilliant fashion, in this Interpreter article.) The human toll hasn’t reached its peak yet, and the full extent will not be known for some time. Possibly never - such is the nature of information under the Chinese government. The shifting goalposts behind “suspected” and “confirmed” cases suggests statistical jiu-jitsu on the metrics to me.
Every year, during Chinese New Year, half of China travels from the major metro areas back to visit family in whatever province they originally lived in. That place is typically far, far away from China’s metro areas. This is extremely common; much of China’s economic opportunity is bunched on its eastern seaboard and associated metro areas. As a result, tons of people relocate to China’s cities to work. It’s typical for all of these people to return to see their families in their home province for the Chinese New Year. I’m not a Chinese cultural expert, but a reasonably good analogue in Western society is traveling to your parents’ place for Christmas.
What’s interesting about this particular holiday is the scale of travel involved. I’m not exaggerating when I say “half of China”. This year’s estimates predicted about 550 million people traveling internally for the Chinese New Year. That’s just about twice the entire population of the United States, or ten percent of the world’s population, depending on which way you want to slice it.
So, combine the largest annual migration known to man, with the timing of this particular quarantine, and you start to get into some very interesting potential economic effects.
Those people were all home for the holidays when the coronavirus quarantine was imposed. All of these people are, thus, forbidden from traveling, and far from their jobs and working lives.
About ten percent of the working world is unable to make it to work.
The question forefront in my mind is: how long does this crisis have to go on before it bubbles up in the world economy? Or into consumer prices into the US?
I’m not sure, but I’m very concerned that we’ll all be learning the answer to that before long.