The stats available for 2019 leave little doubt that last year saw the economy contract. Data for the fourth quarter are not yet available, but they will, in all likelihood, confirm the downward trend seen until then.
There was some hope that in 2020 the economy would pick up a bit, perhaps even during the first half of the year. The Wuhan virus is putting an end to such hope. The last days have only increased the uncertainty surrounding both the spread of the disease and its impacts, either direct or indirect, immediate, or delayed.
On the health front, the last days have seen a spike in infections and deaths. Some people suggest the epidemic peak may yet be away for at least several weeks. The realization that the incubation period can last for a couple of weeks and may, in many cases, be asymptomatic only deepened the uncertainty surrounding the foreseeable evolution of the disease.
First, it is difficult to ascertain how long and how many people may have been carrying the disease around. The extent of contamination may have been ‘hidden’ for some time. On the other hand, that may have contributed to a slower response than desirable, compounding a possible reluctance of authorities to act or publicize matters in ways that they might fear would be counterproductive.
Further, the quarantine of millions – itself a measure without obvious precedents or well-established procedural guidelines – raises questions about its short-term effectiveness and its consequences in the longer term. The extent and duration of the episode are difficult, if not impossible, to assess at this point.
Then, we have the economic losses. Take into consideration the lost days of work, the broken logistics, the canceled flights and travels, to name just a few. Consider not only the lost production and revenue incurred, past and future, but also the additional costs that any recovery will entail. They will affect not only the Chinese economy but almost everyone in a globalized world economy. What can we say about Macau, as dependent as it is from the health, literal and metaphoric, of the mainland economy?
The longer this situation lasts, which is mostly beyond our ability to influence, the more likely that last year’s recession will be prolonged. Hold on tight (panic is not an option) and thank the providence for being so generous in the last decade and a half.