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Sixteen years after the SARS virus infected over 8,000 people and killed 77, a new respiratory virus from China is again sparking fears across the globe as the disease spreads with no vaccine in sight.
The coronavirus, however, is likely to have a bigger economic impact than previous outbreaks thanks to the rapidly growing Chinese economy and its deeper commercial ties to U.S. companies.
In 2003, when the SARS virus hit, China’s GDP was $1.6 trillion. Today, China’s GDP sits around $13 trillion.
Over that period, China has been a growth hub for U.S. companies looking for ways to boost their bottom lines. Now those companies are on the front lines of a growing health pandemic that’s infected nearly 10,000 people and killed at least 213.
Some U.S businesses, like gaming giant Las Vegas Sands which is seeing an 80 percent drop in visitors at its Macau locations amid the outbreak, had no operations when the SARS virus erupted in 2003.
Billionaire chairman of Las Vegas Sands, Sheldon Adelson, noted that all employees in the region are wearing masks, and visitors are being screened for increased temperature which would indicate possible infection.
“I think it would be foolhardy to think we can reduce costs enough to offset [a continuing 80 percent decline. That’s a real problem for any operator,” president and COO of Las Vegas Sands, Rob Goldstein, told analysts.
Here’s a look at China then and now:
China is among the fastest-growing in the world. There are worries China’s growth could take a big hit amid the coronavirus threat.
China is exporting more goods than ever before. In 2018, China was the United States’ largest supplier of goods including electrical machinery ($152 billion), machinery ($117 billion), furniture and bedding ($35 billion), toys and sports equipment ($27 billion), and plastics ($19 billion).
The number of Chinese billionaires is growing. Jack Ma, who recently resigned as chairman of the e-commerce giant he co-founded, Alibaba, is the nation’s richest with a net worth of $42 billion.
Travel has become a key indicator of the quality of life for China’s rising affluent population with more and more Chinese traveling overseas for their vacations, according to Nielsen. Chinese tourists spent an average of $762 per person towards shopping on their most recent overseas trip, while non-Chinese tourists averaged USD 486, according to a 2017 Nielsen survey.
Starbucks announced its closed more than half of its 4,100 stores in mainland China amid coronavirus fears. It’s not the only retailer closing stores: H&M closed at least 45 locations and suspended business travel to and from China for its employees, IKEA shut half of its 30 stores in mainland China.
China is Marriott’s biggest market outside of the U.S. In 2018, the company partnered with Alibaba. The agreement allows Chinese travelers to book Marriott hotels through Alibaba’s travel website.
Visitors to Las Vegas Sands properties in Macau are down 80 percent during a typically busy Lunar New Year season as the coronavirus hits the region. “The current situation is unique and serious,” billionaire Sheldon Adelson told analysts this week. “Our top priority is the health and safety of our employees and guests, and we are doing everything we can to support the government both of Macao and China,” the Las Vegas Sands chairman and CEO added.
