The economic consequences of China flu

The epidemic, writes Dalrymple,

might well have effects far beyond any that its death rate could account for.

The Wuhan virus has woken the world up to

the dangers of allowing China to be the workshop of the world and of relying on it as the ultimate source for supply chains for almost everything, from cars to medicines, from computers to telephones.

No doubt, he says,

normal service will soon resume once the epidemic is over, even if at a lower level, but at the very least, supply chains should be diversified politically and perhaps geographically; dependence on a single country is to industry what dependence on monoculture is to agriculture.

And

just as the heart has its reasons that reason knows not of, so countries may have strategic reasons that economic reasons know not of.

The danger is that the Wuhan virus

will be used as a justification for beggar-thy-neighbour protectionism, and for zero-sum-game economics, to the great impoverishment of the world. Judgment, that mysterious faculty that is so difficult to define or quantify, but which undoubtedly exists, will be needed to adjudicate the claims of strategic security and economic efficiency.
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