World Economy Shudders as Coronavirus Threatens Global Supply Chains

https://www.wsj.com/articles/world-economy-shudders-as-coronavirus-threatens-global-supply-chains-11582474608

by liroyleshed • 6 years ago

83 87 6 years ago

nugget• 6 years ago

I have a lot of very smart, research-inclined friends and it's been interesting to watch their reactions as this potential pandemic develops. About half are taking it extremely seriously (prepping and encouraging others to do the same) and have been since China declared a quarantine of Hubei. The other half are completely brushing it off with statements like "the flu kills [x] people every year anyway". It's one extreme or the other; almost nobody I talk with, who is following the storyline, has a moderate perspective.

01100011• 6 years ago

COVID-19 makes ~20% seriously ill and 10% dead. Influenza kills about, what, 2 out of every 100,000? Don't get me wrong, the flu killed my aunt in her early 50s, but COVID-19 is much worse.

Beyond the immediate medical consequences, there is also the societal reaction and potential overreaction. The world economy has been poised for a pullback and this just might trigger the next global recession(my money is on that happening, even if we find a vaccine next week).

Like always, it's a good idea to have a disaster plan in place. Make sure you have a few weeks of critical medications and food on hand. Help those around you put the current events into perspective, help them stay calm, and help them prepare.

zzzzzzzza• 6 years ago

my understanding is 2% dead (think that number is being borne out in both italy and s korea), which is still much more lethal than the flu

Vomzor4• 6 years ago

I think it would help people understand this is is worse than the flu if we start calling it sars 2.0. Because that’s what it is, sars. https://en.wikipedia.org/wiki/Severe_acute_respiratory_syndr...

Barrin922• 6 years ago

COVID-19 makes ~20% seriously ill and 10% dead

COVID-19 death rates in China are about 2-3% and significantly lower outside of China. (less than one percent). Probably due to the healthcare systems in the Hubei region being pushed to its limits.

Bad flu seasons in the US generally have a fatality rate of about 0.2% and infect about 30 million people annually, killing about 60000.

So even if COVID-19 cannot be contained and will linger around it will likely not be as deadly as influenza.

faitswulff• 6 years ago

It's more like 3% dead, according to Johns Hopkins: https://gisanddata.maps.arcgis.com/apps/opsdashboard/index.h...

forgingahead• 6 years ago

The latter extreme ("Flu / falling off ladders is worse!") is a dangerously misguided line of thinking. Inconvenience is always better than dead, and lest anyone think "dead" is an abstract/unlikely outcome, collapse of supply chains (medical or otherwise), overloaded health systems, lack of hospital/ICU beds, etc can all contribute to death-rates-in-a-pandemic, even if those folks never got infected in the first place.

So the smart money is to be cautiously prepared -- have 1-2 weeks of "stay-at-home" supplies, that is food, water, and self-medicating items. You do not want to dependent on being out and about if this gets worse. Best case, you can have a canned food party once this clears.

Allower• 6 years ago

1-2 weeks? That seems dangerously optimistic to me.

tenpies• 6 years ago

Exactly. You can be prepared and be wrong every time and be okay. You can ignore preparations just once and that's the end of you and your family.

I am not sure why people are so reluctant to see the risk asymmetry in this.

liability• 6 years ago

Having a cabinet of canned food is good policy even without a potential pandemic to worry about.

GhostVII• 6 years ago

Yes, you should be prepared for things like pandemics, because it is not that difficult to have a small amount of preparation. But if you are not in China, you have no reason to prepare for coronavirus specifically. Saying things like "the flu is more dangerous" seems like a perfectly reasonable line of thinking - if you are in North America you should not be preparing for coronavirus any more than you already do for things like the flu. If you do not feel prepared for a coronavirus outbreak, it just means your preparation for the far more serious existing threats was lacking.

flukus3• 6 years ago

Best case, you can have a canned food party once this clears

Also frozen food. Even in worst case scenarios it's hard to see the grid going down for long periods, assuming raw coal/gas can keep arriving or your country has a lot of renewable energy.

eveningcoffee2• 6 years ago

What are they doing for prepping?

Zenst4• 6 years ago

Well, for me - having an nice supply of lucozade and other foods that can consume whilst having bad flu based upon experience of a few bad flu's in my life (50 yrs+).

So basic foods - soups (non dairy based ones btw as always find anything diary for me turns instantly into mucus and soon builds up on my lungs). Biscuits and other dry foods that palatable. Kinda things you stock for a just in case period anyhow.

Oh and tissues and toilet rolls, never want to be short of those.

In general, common sense and what works for you when you're ill.

A4ET8a8uTh0• 6 years ago

I might be the middle you are referring to. I see it as a potential issue that may or may not become a larger issue.

I am buying extra case of water, ramen during weekly grocery runs. But I did not go into full prep mode.

I initially completely dismissed it as media induced panic though.

aiyodev• 6 years ago

Second group of friends needs to take a class in network theory.

Vomzor4• 6 years ago

The daily updates in r/supplychain are a good overview of what’s going on.

https://www.reddit.com/r/supplychain/comments/f87aec/covid19...

andrewflnr• 6 years ago

What a neat little subreddit.

taiwanboy• 6 years ago

Every country needs to take a hard look at the supply chain of critical goods such as medical supplies or chemicals and figure out how to reshore these factories. Even if the Chinese migrant workers comes back to the factory (estimated only around 20-30% did), most of the small businesses might be gone by then.

https://asia.nikkei.com/Business/Industry-in-focus/Virus-hit... 35% of 1,506 Chinese SMEs surveyed in early February expect to run out of cash within 1 month, 85% within 3 months. Chinese small business which account for 99.8% of registered companies in China and employ 79.4% of workers, according to the latest official statistics. They contribute more than 60% of gross domestic product and, for the government, more than 50% of tax revenue.

https://www.zerohedge.com/economics/chinese-workers-refuse-g... Chinese workers refuse to go back to work

https://www.zerohedge.com/economics/jpmorgan-now-expects-chi... JPMorgan Now Expects China Q1 GDP To Drop To 1%, Crash To -4% If Coronavirus Is Not Contained

throwawayhhakdl• 6 years ago

-4% Chinese GDP would kill a lot more than the virus...

rfoo• 6 years ago

And imagine what would happen if an incident like this hits TSMC, the world definitely needs some reconsideration on where we manufacture things.

iends• 6 years ago

America's response has been somewhat alarming. In 2018, the Trump admin cut funding to a lot of health programs to deal with pandemic responses at the CDC, HHS, etc: https://foreignpolicy.com/2020/01/31/coronavirus-china-trump...

Recent proposals are asking for more cuts: https://foreignpolicy.com/2020/02/10/trump-world-health-orga...

Recently, the CDC has botched test kit rollouts, preventing widespread testing: https://www.politico.com/news/2020/02/20/cdc-coronavirus-116...

Without getting too political, I don't have any confidence that America's response will get it done.

pbourke• 6 years ago

Yeah the messed up testing is very concerning. The US has done 500 or so tests in total. SK is ramping to 10,000 per day. I don’t think it’s clear when the US would be in a position to mount a similar response if needed.

xvilka• 6 years ago

It might trigger the bigger move to automation and robotization of the scale manufacturing and services. On the other hand, more people will be left without the job.

flukus3• 6 years ago

It's hard to tell the scale of it, especially as an outsider but I've read a couple of articles like this one: https://www.techinasia.com/chinas-ecommerce-robots-delivery . Once the dust has settled many might not have jobs to go back to and in turn this probably makes it harder to quarantine people, would you take a "holiday" if there was a good chance you'd be replaced by a robot before you returned?

remote_phone• 6 years ago

This is the exact equivalent of distributed service going down or suffering latency issues and affecting critical downstream services. There are supply chains set up but no real thoughts or solutions when catastrophic problems occur, like if China suffers a pandemic crisis for example.

I wonder if those things will be in consideration going forward or if we will keep making the same mistakes over and over again.

icegreentea22• 6 years ago

I mean, it's literally a coordination problem. Redundancy and resiliency rarely decrease costs in normal operation. If you're operating in a vertical, and all your competitors are operating diverse/redundant supply lines, you are at a tremendous advantage to defect and slim down. It's only when disruptions become frequent enough to model in a straight forward way (and also frequent enough to loom in people's memories) that we can expect a pure market solution.

The same way tech companies rarely actually go for multi-cloud setups.

Our primary system of incentives are not setup to consistently deliver black swan redundancy.

danans• 6 years ago

We shouldn't forget that the novelty of this disease, and the unknowns surrounding it, are causing the (probably necessary) extreme reactions like those we're seeing now.

In the longer run, after the patterns are better understood and treatment protocols are in place, we will probably normalize to whatever the non-zero steady state infection and fatality rates that results, much as we do with diseases like influenza, malaria, etc.

As that happens, the reactionary controls that are in place today will gradually lessen and we'll be back to a business as usual.

Of course, the short term shock of this might send a fragile world economy off the rails, but pretty much any globally correlated emergency incident would have done that.

elkos• 6 years ago

I understand that the impact of COVID-19 plays an important role. Shouldn't we be pointing out on other systemic issues that impact the global economic system? Is it as robust as it could get?

World Economy Shudders as Coronavirus Threatens Global Supply Chains

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