China has confirmed human-to-human transmission of a deadly virus. Little is known about the form of coronavirus that originated there, other than that it causes pneumonia. It appears closely related to Sars, or severe acute respiratory syndrome, which killed more than 700 people and devastated the Hong Kong economy in early 2003. This time, investors are already pricing in scary outcomes. These look overdone.

The fears are understandable.  Starting this Thursday, Asian travellers will make 3bn trips over the Lunar New Year holidays. The new virus has already spread across more countries than Sars. Its economic impact could therefore be broader. Sars, even with its effects largely confined to Hong Kong, caused $50bn in output losses.

An equivalent epidemic would cause bigger economic damage today. This is a vulnerable time. Chinese growth is slowing and political unrest is shaking Hong Kong.