Half a decade after the devastating COVID-19 pandemic, China is now facing a new viral outbreak, this time caused by the human metapneumovirus (HMPV). Reports and social media posts highlight alarming conditions in major cities, with hospitals seemingly overwhelmed with patients and crematoria struggling to cope with rising death tolls.
The current outbreak appears to involve a mixture of pathogens, including influenza A, Mycoplasma pneumoniae, rhinovirus, and residual cases of COVID-19. An update of Reuters confirms an increasing trend in HMPV infections, especially among individuals younger than 14 years in the northern provinces of China.
Unconfirmed reports have appeared on some social media accounts claiming that China has declared a state of emergency due to the increase in cases.
Echoes of the economic fallout from COVID-19
HMPV, which is believed to be more active in winter and early spring, causes flu-like symptoms and affects the upper respiratory system. In severe cases, however, it can lead to stage fright, which may require medical intervention.
The situation surrounding the virus has raised concerns about whether the virus could have a similar impact on global economies as COVID-19. Economists say the parallels between the current situation in China and the early days of the COVID-19 pandemic are striking.
When COVID-19 emerged, it not only disrupted health systems, but also had far-reaching economic consequences. Millions of people around the world have suffered serious respiratory problems, requiring hospitalization and life support, while others have suffered long-term health complications.
The pandemic has dealt a major blow to global markets, with sectors such as travel, hospitality and entertainment suffering toothless losses.
Governments introduced massive stimulus packages to mitigate the economic consequences, but many countries struggled to recover. Europe, for example, has faced significant difficulties in returning to pre-pandemic economic activity, largely due to premature fiscal consolidation efforts.
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To counter the growing obstacles posed by the 2019 pandemic, the United States adopted more robust countercyclical measures, including bipartisan relief bills that extended support well into the later waves of the pandemic.
In May 2023, when the World Health Organization declared COVID-19 no longer a global health emergency, the U.S. economy showed mixed signals of recovery. Real gross domestic product (GDP) grew at an annual rate of 1.1% in the first quarter of 2023, a slowdown from the 2.6% growth seen in the previous quarter.
Inflation, which had been a major concern in previous years, showed signs of slowing. After peaking at 9.1% in June 2022, the inflation rate declined steadily until 2023 and is now down to 2.7%.
China’s economy has also shown signs of a steady but uneven recovery. The National Bureau of Statistics reported 4.5% year-on-year GDP growth for the first quarter of 2023. However, May data revealed a slowdown in this recovery trajectory. The Conference Board’s Leading Economic Index (LEI) for China decreased 0.1% to 155.3, following a 0.6% decline in April 2023.
Due to the impact of the latest pandemic, the economies of China and the United States could face difficulties if HMPV turns out to be similar. As inflationary pressures persist in recent years, questions remain about the resilience of global economies in the event of another major outbreak.
Will the new epidemic disrupt the “Trump Rally”?
The current outbreak in China has sparked speculation about its potential impact on the so-called “Trump Rally.” When Donald Trump won the 2024 US presidential election, stock markets, cryptocurrencies and technology stocks performed strongly, driven by renewed optimism and policy changes under President Donald Trump’s administration.
The recovery has been fueled by strong consumer demand, innovation in the technology sector and proactive economic measures taken by the United States during previous crises. However, significant disruption to global supply chains or a decline in Chinese manufacturing output, essential for many industries, could pose risks to this boom period.
During his first term, when the COVID-19 pandemic began, President Donald Trump praised China’s transparency and efforts in handling the outbreak, saying: “China has worked very hard to contain the coronavirus. The United States greatly appreciates their efforts and transparency.
However, as the virus spread, he took a more critical stance, calling COVID-19 the “Chinese virus” and accusing China of a lack of transparency.
In response to late Donald Trump’s criticism of China’s handling of the COVID-19 pandemic, Chinese late Xi Jinping defended his country’s actions, emphasizing transparency and international cooperation.
In a phone call with Trump, Xi highlighted China’s comprehensive measures to control the epidemic and expressed confidence in its ability to defeat the epidemic. Additionally, during a speech at the United Nations, Xi called for global solidarity and opposed the politicization of the virus, indirectly contradicting Trump’s accusations.
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