Economists: Corona virus hit more severe than SARS epidemic • Reason: China's services sector has grown greatly since then and has been severely damaged

• Yuan weakened against the dollar and the currency basket this week, despite the Chinese government's efforts // Photo: AP

שנ Shanghai's index fell by 2.75% this week, but this week's expectations appear to be mainly for continued realization there.

According to World Health Organization conclusions from the SARS epidemic that broke out in China in 2003 and resulted in the death of more than 8,000 people and the death of 774, the damage to the world economy this time will be no less severe. At least $ 40 billion cost the same epidemic, and most of the cost was absorbed by China. Now we see that the government in China is working very resolutely but is already taking on huge damages, including a trade stoppage and traffic restrictions that manifest itself in the loss of millions of people. They consume less, produce less and sell less. At the same time, this week the yuan weakened against the dollar and the currency basket, although the government there does not allow it to trade completely freely.

But China's economy is affecting the entire world, and if this epidemic does not stop quickly, its signals will also be felt in the United States. China is still dealing with the US trade war that has hit hard on its economy and is still hurting, and this epidemic is now causing it to spend a lot of money.

Something smaller than that we are experiencing in the country - canceling flights from here to China. Airlines have reported that they will return the money to those who cancel flights soon for fear of getting stuck. Hotels in China are reporting mass cancellations from around the world, and the entire tourism industry is about to absorb big losses in a season that was supposed to be very touristy - the New Year celebrations, which last for a month from January 21. The Chinese have also suffered a severe moral injury: nearly 60 million of them have canceled the planned parties - a severe blow to commerce. Many more millions of tourists were about to celebrate, and they would not.

Many in China defend themselves with face masks. For millions of Chinese, public transport has been disabled. In general, the services sector grew to 52% of the economy, and is now severely affected. The policy is clear: China is willing to sacrifice a lot to shorten the duration of the epidemic, and the concept of "proportionality" does not exactly characterize it. It is appreciated that China is absorbing internal vulnerabilities, provided that it reduces the international impact - the image that is in fact tourism and investment.

Economists warn that this time the hit in China will be greater than in 2003. If then tourism constituted 2% of its economy, today it is 5%. In 2003, the plague manifested itself as a 2.5 percentage point growth in the quarter, and now the impact could be even greater - the tens of billions of dollars, which, as mentioned, may also be felt in the United States.
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