After swiftly abandoning its 0-Covid lockdown policy–without replacing it with anything resembling a national Covid protocol–China is facing a Covid disaster that could see more than 1 million deaths from the coronavirus in 2023. That would put China’s death toll from the Pandemic on par with that of the United States, which has seen 1.1 million people die from Covid19 since the pandemic began. The magnitude of the disaster is actually understated by that comparison since China’s comparable death toll would be condensed into a much shorter period than that in the United States.

We don’t know with any degree of precision what a pandemic outbreak like this would do to the economies of China and the world. But we can make some reasonable guesses. After a period of denial–which is what the Chinese government is now, this new outbreak will lead to quarantines and lockdowns again–of the sort that has paralyzed big parts of China’s economy in the past. The hospital system will be overwhelmed by new cases, especially among the under-vaccinated elderly. China has already seen voluntary stay-at-home actions by workers, we can expect those to spread.

Domestically China’s economy will slow. In the third quarter, GDP grew at a rate of 3.9% year over year. I think Beijing can forget about its ambitions of getting growth to an annual 5% rate or better in 2023. although I’m sure the government will try by pouring money into the economy. The amount of cash that the People’s Bank can devote to this stimulus is, however, limited by the need to protect a weak yuan and a fear that more cash would produce a higher inflation rate.

China’s stock market will show its usual pattern of spiking on the rumor or fact of stimulus and plunging when the stimulus proves inadequate to revive growth or increase consumer spending. Those spikes and plunges will make it hard to invest in Chinese stocks such as Alibaba (BABA), although there will be substantial profits to be made by traders who can somehow call the stimulus spikes accurately.

The shares of international companies won’t have that kind of People’s Bank stimulus hopes to buoy their fortunes. The shares of companies ranging from Volkswagen (VWAPY) to Starbucks (SBUX) to MGM Resorts International (MGM) will take substantial further hits as revenue growth lags because of the surging pandemic in China. I’d sell positions in these international stocks that are dependent for their valuations on robust growth in China. I will sell MGM International and Volkswagen out of my online portfolios tomorrow.

And the new Chinese outbreak is likely to be as disruption to global supply chains as the 0-Covid lockdowns were. Companies such as Apple (AAPL) that do the bulk of their manufacturing in China will take heavy hits. On a more general level, I’d expect to see a return of shortages in such technology goods as chips and solar panels.

My estimate from reading the international medical assessments is that the crisis and the death rate will accelerate through March 2023.