Shock propagation in international value chains: the case of coronavirus.

Summary Before spreading worldwide, the coronavirus epidemic appeared in Hubei province. To contain the spread of the virus, the Chinese government imposed quarantine measures, resulting in a slowdown in economic activity. Here we examine how this slowdown in production, initially limited to Hubei province, spreads to the global economy via international value chains. Dependence on Chinese inputs has increased dramatically since the early 2000s. As a result, most countries are exposed to the Chinese slowdown, both directly through their imports of Chinese intermediates and indirectly, through Chinese value added incorporated into other production inputs. This note quantifies France's total exposure compared to that of other countries. First, we calculate the share of Chinese value added in French production. Then, we use country- and sector-level data to quantify the impact of quarantine measures on French GDP.