Slowly but surely, the wheels of industry – even social life itself – are grinding to a halt.
If not for the invention of the internet and the various apps that it, there wouldn’t be any commerce or even virtual social interaction that would be taking place during these times of quarantines and lockdowns and social isolation.
But I digress. Just as the rate of infections from the coronavirus grow exponentially by the day, fiscal and monetary authorities in an increasing number of countries around the world increase their spending – and tighten physical interaction — to try and get ahead of the debilitating consequence of the increasing number of infections from the corona virus.
One country after another is closing its borders, limiting (if not entirely) preventing person to person contact.
Guess online dating will just have to evolve to online romances, online dinners, online kissing and online divorces.
No pain, no gain! China’s – the epicentre of the virus – actions provide a guide map on what happens next.
China quarantined and locked down activity of about 60 million inhabitants of Wuhan in Hubei province – what other countries are now progressively moving towards – if memory serves me right, in early February. This is at the same time that the Chinese government and the People’s Bank of China (PBOC) were rolling out stimulus measures – what other fiscal and money authorities are implementing now.
While it didn’t prevent Chinese economic activity indicators from contracting (big time): Industrial production dropped by 13.5% (year-on-year) in the January-February period following a 6.9% expansion in December; fixed asset investment plunged by 24.5% over the same period (following a 5.4% gain); and, retail sales sank by 20.5% (after growing by 8.0% at the end of 2019), reports are that, as at 20 March, China hasn’t recorded no domestically-transmitted cases of the virus for a second day running.
This is reflected in China’s stock market’s relative outperformance. While most major equity markets have lost between a fifth and a third of their value this year-to-date, the Shanghai composite index is down by 10 percent.
It would have been much better were it not for the recent ‘People’s Daily, China’ report that, “39 new cases of #COVID19 reported on Chinese mainland on Thursday [19 March], all of which were imported …”
Unless a vaccine is discovered soon, the world will just have to shut down all commerce and social activities in the meantime if we are to live and make wealth another day.