In an emergency move to mitigate the negative effects that the novel coronavirus is expected to cause the United States economy, the US Federal Reserve on Tuesday cut its benchmark interest rate by 50 basis points to a target range of 1 percent to 1.25 percent.

"We saw a risk to the outlook for the economy and chose to act," Fed Chairman Jerome Powell said when announcing the decision at a news conference. The virus has so far spread to about 80 countries taking a heavy toll on air travel, tourism and other industries.

That it was the first emergency rate action since the 2008/09 global financial crisis points to the magnitude of risks and challenges the world economy is now facing. The fact that the Dow Jones Industrial Average index still ended the day down 786 points, a nearly 3 percent drop, indicates that lower interest rates alone are not enough to allay market fears over possible damage to global supply chains and factory output.

To corroborate the deepening worries over global growth, the finance ministers and central bankers of the seven most developed nations in the world also issued a statement on Tuesday pledging to use "all appropriate tools" in response to the rising risks of a possible global pandemic, as more new cases are now being reported outside China than inside.

While the full extent of the virus' economic impact globally remains to be seen, the heavy blow that China's factories suffered in February because of the epidemic may offer some hint. The Caixin/Markit Manufacturing Purchasing Managers Index, which gauges factory activity, plummeted sharply from the 51.1 reading in January to 40.3 last month, the lowest level since the survey started in 2004.

Countries are now more economically intertwined and interdependent than they have ever been. In the face of the "greatest danger" to the world economy since the global financial crisis — as the Organization for Economic Cooperation and Development described the situation in its latest Interim Economic Outlook — they must work more closely to coordinate their policies to offset the negative impacts on the economy.

The experience China has accumulated and the lessons it has learned in its fight against the epidemic can be inspirational for other countries facing the same enemy of humanity. China has already provided coronavirus test kits to Pakistan and Japan, sent medical experts to Iran, and shared its diagnosis and treatment plans with many other countries.

While it is a big challenge to stabilize the world economy amid all the uncertainties brought by the virus, the problem the world faces today is in essence a medical issue, which, with the containment of the virus and the elimination of fear of it, will be resolved. The axiom that "confidence is more precious than gold" in the dark days of the global financial crisis over 10 years ago still holds true today.