Are we overly pessimistic about containing the coronavirus?

February 25, 2020 16:18
A street vendor sells face masks outside a railway station in Milan following the coronavirus outbreak. Italy, South Korea and Japan have all seen a spike in infections, sparking fears of a global pandemic. Photo: Reuters

Human beings are often either too optimistic or too pessimistic on various matters, but the actual outcomes, in the real world, turn out to be somewhere in between.

Although China has taken stringent measures, including the lockdown of more than 80 cities since the end of January, to contain the coronavirus, the epidemic has spread beyond the country.

Wall Street suffered a panic selloff on Monday after cases spiked in South Korea, Japan and Italy.

It shows the market had responded too slowly to the virus earlier and had not fully priced in the risk. Given the situation, there might be further downside risk in the short term.

As governments in other countries may find it hard to impose strict lockdowns like China does, the situation is quite worrying, particularly in underdeveloped nations.

Gabriel Leung, dean of the faculty of medicine at the University of Hong Kong, has estimated that up to 60 percent of world’s population could be affected under the worst scenario if there is a major global pandemic. That would mean that up to 84 million people might be killed, assuming a mortality rate of 2 percent.

To put that into perceptive, around 60 million people died in the world last year. Of this, cardiovascular disease and cancer were the top two causes of global death, killing 18 million and 10 million people respectively in 2019.

This sounds really scary. Still, such projection may be exceedingly pessimistic. Since some sort of prevention measures will definitely be carried out globally, even though not 100 percent effective, it should be possible to bring down the infection rate.

A number of cures are now being developed, and have shown some degree of progress, suggesting a good chance that the actual fatality rate would be lower than the 2 percent estimated level.

This article appeared in the Hong Kong Economic Journal on Feb 25

Translation by Julie Zhu

[Chinese version 中文版]

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Hong Kong Economic Journal columnist