Now that Covid-19 has become a pandemic, what does it mean for economic globalisation? At first glance, the pandemic seems likely to further impede globalisation as every country tries to protect itself from imported cases by limiting the entry of foreigners. Previously, I advocated “diversified globalisation” , with an emphasis on the second sourcing of critical supplies, as the way forward. However, diversification works when only one or two places in the world are hit by an epidemic or a natural disaster; it does not work when the entire world is engulfed in a pandemic. Moreover, pandemics happen not infrequently. Given the massive cross-border flows of people today, a local epidemic can easily turn into a global pandemic. Thus, different countries may have a motivation for turning inward and reducing their dependence on often interruptible international trade. However, economic globalisation has created and continues to create so much value for the whole world that we cannot afford to revert to isolationism and total self-sufficiency just to avoid the effects of pandemics. Since the second world war, all the developing economies which achieved developed status – Japan , Hong Kong, Singapore, Taiwan and South Korea – were able to do so because of economic globalisation. We cannot and should not abandon globalisation. Instead, we need to be better prepared for epidemics and pandemics in future. An epidemic or a pandemic will disrupt both supply and demand , whether domestic or foreign, for any economy. Thus, domestic shortages will develop in almost every sector, whether of intermediate or final goods. This calls for the maintenance of an inventory of essential goods, including medical equipment and supplies , sufficient for local demand for three months. Governments should have emergency plans ready to impose rationing and prevent price gouging if necessary. How the coronavirus is revolutionising China’s consumer landscape By ensuring adequate supplies and keeping the public fully informed, it is possible to prevent panic buying . At the same time, domestic production should continue. Selected hospitals should be designated as isolation hospitals on standby for the confinement and treatment of identified infected patients. Isolation facilities should be maintained for foreign visitors and returning residents. Ample protective gear should be kept in stock for the use of hospital personnel. The use of robots for routine tasks such as delivering meals or mopping floors can also reduce the probability of infection of hospital staff. A free-standing medical laboratory staffed by top-notch experts should be maintained. At the first sign of a new disease, research should commence immediately on the origin of the disease, and the development of a quick and accurate test, treatments, and a vaccine , perhaps in collaboration with other leading national laboratories. While non-essential international and domestic travel should be discouraged, it cannot be avoided altogether, especially if economic globalisation is to continue. A digital version of something like the World Health Organisation’s yellow fellow vaccination certificate can be useful for facilitating cross-border travel. Lacking a leader like Singapore’s, Hongkongers find their can-do spirit It should be an up-to-date record of the vaccinations and inoculations a traveller has had, as well as antibodies. Thus, for example, someone who has recovered from Covid-19 would carry antibodies against the virus, and should be admitted without a quarantine period. People who need to travel will be able to do so freely and expeditiously. The WHO should also maintain a depository for known vaccines in the event that they are needed again. Early identification and isolation of infected patients, to prevent them from infecting others, is the key to controlling an epidemic. Early identification also facilitates tracing of contacts of the infected patients, thus limiting further transmission. Rapid testing contributes greatly to the success of early identification, and reduces the window period during which an as-yet-identified infected patient can infect others. One lesson we have learned from the Covid-19 pandemic is the importance of acting early and fast. In controlling a pandemic, it is always better to err on the side of caution, because many lives are at stake. The worst that can happen is that we are unnecessarily quarantined for 14 days. But by protecting ourselves and therefore others against infection, we may have saved an untold number of lives. Yes, economic globalisation will survive this and future pandemics if we remain vigilant and well prepared. Lawrence J. Lau is Ralph and Claire Landau Professor of Economics, the Chinese University of Hong Kong, and Kwoh-Ting Li Professor in Economic Development, Emeritus, Stanford University Purchase the China AI Report 2020 brought to you by SCMP Research and enjoy a 20% discount (original price US$400). This 60-page all new intelligence report gives you first-hand insights and analysis into the latest industry developments and intelligence about China AI. Get exclusive access to our webinars for continuous learning, and interact with China AI executives in live Q&A. Offer valid until 31 March 2020.