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During the month of December 2019, a pneumonia outbreak was reported in Wuhan, China. Later that month on December 31 the outbreak was identified as a new strain of the Coronavirus (named NCOV virus), a virus known for causing respiratory infections which include the common cold.
Having 2 months passed since it is reported inception, and an ever-increasing death tool and infected rate, it is now clear the effects of this outbreak on the Chinese, the asian and the global economy are being felt in a profound and serious manner, in a world that is increasingly directly or indirectly affected by what happens in China.
With now two cities on lockdown and others working at a much slower pace, trasnportation is conditioned within and without of China, affecting transit throughout Asia, as most countries of the region cancel their flights to and from China. All having a negative impact in the Asian economies that are most dependent on China, with civil society being forced to adapt as daily routines shift, habits are altered, and remote working seems to be the new normal.
Consequences
Yet not everything is grim. The rise of the NCOV virus and the subsequent reaction to it on a personal and institutional level is thought of by some as an important case-study that may reveal opportunities and it is a testament of how economies, nations and people face natural disasters, knowing that despite everything, the world has to go on moving.
Work Conditions
First, the Coronavirus has triggered the world´s biggest and never-before-seen work-from-home experiment.
Yes, it is true. After the self-imposed and sometimes institutionally imposed quarantine period to citizens suspected of carrying the symptoms of the virus, now in many offices across Asia, desks are empty, shops and supermarkets are closed and yet the work continues, as people find alternatives to still be productive by working from home, shopping and selling online and digitally supplying webinars, tutorials, and others.
Knowing full well that in some professions, face to face contact is an essential factor, in others this unexpected experiment has been so well received that employers are considering adopting it as a more permanent measure, stated by CNN in a recent article, “for those who advocate more flexible working options, the past weeks mark a possible step toward widespread – and long awaited – reform.”
Some Companies are benefitting from this situation
Some say that “one man´s tragedy is another´s opportunity” and nothing appears to be more truthful than what is currently happening to some companies in the wake of this outbreak.
From online entertainment to digital services, online medical consulting and other education apps, some Chinese internet companies have been seeing a surge in demand during this crisis.
The Chinese New Year is the prime season for Chinese blockbusters, however this year the virus led movie makers to premiere their movies on apps like TikTok and iQiyi, to diminish losses.
As reported by KR-Asia, an online platform keeping track of the most recent technology driven businesses affecting the Asia Pacific region, it appears that businesses that have a strong technological and digital backbone and endured and even sometimes thrived throughout this crisis.
Overall, these are important lessons that entrepreneurs must learn. If « what does not kill us, make us stronger ” in indeed true. Some businesses might find in this situation an opportunity to reform and be more resilient next time something like this happens.
The stock market will come back
If the past has taught us, that after the SARS virus from 2003 there were profits to be made. The Coronavirus of 2019 is already being a cause to reposition of funds in certain companies having expectation of a rebound
Publications like the Financial Times have already outlined in a recent article how there are some obvious candidates, such as airlines, restaurants and other businesses that require people to be in proximity of each other. All which have been hit particularly hard, as cities and factories have been shut down.
Coming back again to the SARS epidemic, Cathay Pacific´s share price nearly doubled between 2003 and mid-2004, at a time when public opinion was confident that the virus had been beaten. Other industries will be harder to tell, but it will be important for investors to closely monitor the stock market, considering that when the stock prices reach their bottom, then it will be the right time to invest.
The system is resilient, and it will learn from this
If in the past, China was accused of not doing enough to contain previous outbreaks, as of now the same accusation cannot be put forward, as China now has means and infrastructure that it did not have before.
Though the casualties have already surpassed those of the SARS virus, there are already signs that the contagion concerns are being contained, as China employs all its infrastructure in order to ensure that the virus does not spread out.
In fact, China recently witnessed a drop in new virus cases, which appears to be a sign that the measures undertaken by the government are slowly producing effects. This is also a good sign in the sense that this crisis will be a sort of “training” for future emergencies and will allows the system to lean and evolve.
Conclusion
It is still early to support a definite outcome of this outbreak and to what will be the full impact of it in the global economy.
Nevertheless, what is evident is that every time a worldwide event such as this one takes place in fast paced economies, society through its resourcefulness and ability to innovate, always tries to adapt and find alternative solutions with the same or similar result as the original ones.
The great lesson that entrepreneurs in Asia (or even those working with Asia) should take from this, is that “survival of the fittest” in the corporate world is about how fast you can adapt. Those that learn this lesson will come out of this crisis stronger and as said above, learn from it to face new emergencies when the time comes.