COVID-19 has had a dramatic impact on China’s economy. Jenna Ross at Visual Capitalist describes how the effects on their economy could foreshadow what the rest of the world can expect. While China turns the corner on the health side of the story, the economic side is telling its story. This Article via the World Economic Forum uses visualization to tell this economic story. Countries in the early stages of the outbreak should take notice.
While daily life is returning to normal in China, as factories and shops reopen, the initial supply side shock may be over. However, per the article, the country now faces two forms of demand shock – and here is an element of foreshadow: the first takes the form of domestic demand slow to gain traction due to psychological scars, bankruptcies, and job losses. A survey conducted by a Beijing financial firm indicates that almost 65% of respondents plan to restrain their spending habits after the virus. The second takes the form of overseas demand suffering as more countries face outbreaks. Many stores are closing up shop and/or cancelling orders, leading to an oversupply of goods.
All this leads to economists expectations that China’s GDP will shrink in the first quarter of 2020—the country’s first decline since 1976. Based on preliminary economic data, the article concludes that other countries are destined to follow the same path. In the U.S., layoffs have been widespread, with total unemployment insurance claims rising to almost 3.3 million in the week ending March 21. About half the U.S. population is on stay-at-home orders, severely restricting economic activity. Other countries are also feeling the economic impact of COVID-19.
This story is still to be told – but it’s wise to look at every signal and understand the possible futures that are emerging. Other posts on COVID-19 included via links below.
FEATURED: A Post Pandemic Society
Mid-Pandemic Impact on Supply Chains
Post COVID-19 Economic Recovery Scenarios
Is The Canary Dead?
How Will The Corona Virus Impact Globalization?
The Corona Virus Serves As A Catalyst For Change
COVID-19 Monday Morning News
Anatomy Of An Outbreak