On the basis of a preliminary input–output analysis, we suggest that China’s countermeasures and the resilience of suppressed demand could limit the long-term economic impact of the current coronavirus outbreak. In the short term, however, we estimate that the most sensitive sectors — transportation, tourism, retail and entertainment — could lose up to 18% of their usual output (see go.nature.com/3bxqzjm).

China hosts more than 18 million small and medium-sized enterprises. These have been severely affected by the COVID-19 outbreak because they account for almost 80% of enterprise jobs and 50% of private firms’ exports. Widespread production disruption, surging inventory costs from depressed domestic consumption and rigid expenditure on rents, wages and interest are all hitting the fragile capital chain of these businesses. This could result in waves of bank failures.

The Chinese government has made swift and decisive efforts to control the virus’s spread, and international aid has exceeded expectations. Depending on the time it takes for the outbreak to peak, measures that could mitigate short-term economic risks include campaigns to promote small enterprises, policy incentives such as financial subsidies, delayed tax payments or reduced mortgage interest, and restoring market confidence through greater publicity and public scrutiny.