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Testimony
Assessment of COVID-19’s Impact on
Small and Medium-Sized Enterprises
Implications from China
Jennifer Bouey
CT-524
Testimony presented before the House Small Business Committee on March 10, 2020.
C O R P O R A T I O N
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ChapterTitle 1
RA®
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Assessment of COVID-19’s Impact on Small and Medium-Sized Enterprises: Implications
from China
Testimony of Jennifer Bouey
1
The RAND Corporation
2
Before the Committee on Small Business
United States House of Representatives
March 10, 2020
hairwoman Velázquez, Ranking Member Chabot, and members of the committee, thank
you for inviting me to testify on the impact of the coronavirus outbreak on the economy
in China and small and medium-sized enterprises (SMEs) there. As the first country hit
by the new coronavirus, China’s epidemic patterns and actions and the combined impact on
China’s SMEs may provide some useful insights for the U.S. government and businesses. I will
first briefly introduce the characteristics of the coronavirus disease 2019 (COVID-19) and the
epidemic it is causing. Next, I will describe the epidemic patterns in China, China’s actions, and
the combined impact on China’s economy in three stages. Last, I will summarize the epidemic’s
impact on the global supply chain and a few recommendations on the control of the epidemic and
assistance for U.S. SMEs facing the epidemic.
COVID-19 Epidemic: Virus, Host, Environment, and Transmission
SARS-CoV-2 (the virus that causes COVID-19) is the latest member of the coronavirus
family affecting humans. This type of virus is commonly found in humans and other mammals.
In humans, coronavirus has four strains that cause mild clinical symptoms, usually referred as the
common cold. Two other strains are more lethal: SARS-CoV and MERS-CoV. These two strains
cause case-fatality rates (CFRs) of 9.6 percent and 34.4 percent, respectively.
3
The new zoonotic
1
The opinions and conclusions expressed in this testimony are the author’s alone and should not be interpreted as
representing those of the RAND Corporation or any of its research sponsors.
2
The RAND Corporation is a research organization that develops solutions to public policy challenges to help make
communities throughout the world safer and more secure, healthier, and more prosperous. RAND is nonprofit,
nonpartisan, and committed to the public interest.
3
World Health Organization, “Middle East Respiratory Syndrome Coronavirus (MERS-CoV): WHO MERS Global
Summary and Assessment of Risk,” July 2019
(https://apps.who.int/iris/bitstream/handle/10665/326126/WHO-MERS-RA-19.1-eng.pdf?ua=1).
C
virus (i.e., can spread between humans and other animal species) shares a high degree of
genomic similarity to coronavirus in bats and to SARS-CoV in humans.
4
Because this is a new
viral challenge to humans, there is no preexisting immunity in humans and everyone is assumed
to be a susceptible host to COVID-19.
5
The most recent data show that COVID-19 is likely to be more contagious but less likely to
cause severe clinical symptoms and deaths than SARS and MERS. A Chinese clinical study
recorded 72,314 COVID-19 cases diagnosed by February 11, showing an overall CFR of 2.3
percent, with 81 percent of cases being mild. The CFR jumped to 8 percent among patients 70–
79 years old and to 14.8 percent among patients 80 years old and older.
6
Most COVID-19
patients have mild symptoms, similar to a flu. People with mild symptoms might not go to the
hospital or even necessarily know that they have the disease but could still carry the infection;
accordingly, person-to-person transmission is not limited to hospital settings, which is what
happened in the SARS and MERS cases. COVID-19 is transmitted via droplets and fomites
(contact with contaminated surfaces). Data synthesis from several preliminary reports on
COVID-19 indicates a coronavirus patient, on average, can transmit the disease to three people
without intervention (compared with one for the common influenza, two for Ebola, and 18 for
the measles).
7
The World Health Organization (WHO) reported that such transmission in China
occurred most often at the household level, as 78 percent to 85 percent of disease clusters were
family clusters.
8
The moderately high infectivity, mild clinical symptoms, uncertain incubation
period, no human immunity, and possibility of asymptomatic healthy carriers may mean that the
novel virus is likely to cause worldwide transmissions. At the time of this testimony, there have
been COVID-19 case reports on every continent except Antarctica, while China still has the
