The world economy has obviously had a cold.Originally, the global business cycle was at a particularly vulnerable time node, but at this time, the COVID Virus disease (COVID-19) epidemic was outbreak.The total global output growth in 2019 is only 2.9%, not only the slowest pace since 2008 to 2009, but also 0.4 percentage points higher than the 2.5%threshold that is usually marked by the global economic recession.
In addition, the vulnerability of most major economies last year has increased, making the prospects in early 2020 unclear.The global fourth largest economy in Japan in the fourth quarter of 2019 domestic GDP (GDP) has shrunk by 6.3%, which is much more serious than the consumption tax again.The industrial output value of the world's fifth -largest economy in Germany and the tenth largest economy France appeared in December last year. December of which had negative 3.5%and a sharp decline in negative 2.6%.
In contrast, the world's second largest economy in the United States shows quite toughness, but the actual GDP in the fourth quarter of 2019 (after exclusion of inflation factor) increased by 2.1%, which is not prosperous.The world's largest economy currently calculated based on purchasing power, China's growth in the last quarter of 2019 has slowed to 6%, which is also the lowest point in 27 years.
In other words, there must be no accidents at the beginning of this year, but a major accident occurred: China's crown disease epidemic impact.In the past month, unprecedented epidemic prevention measures for Hubei Province (58.5 million) in Hubei Province (58.5 million) are combined with strict restrictions on intercity (and international) travel, making the Chinese economy almost stagnant.
Morgan Stanley Chinese team's daily activities follow -up report highlights the impact of this stop on the country.As of February 20th, coal consumption (still accounting for 60%of China's total energy consumption) still exists by 38%of the gap compared with the same period last year.It is difficult to return to work after the Lunar New Year holiday.
The supply of supply interruptions is particularly serious.China not only has the largest exporter in the world far from other countries, but also plays a key core role in the global value chain.Recent research shows that the global value chain accounts for nearly 75%of global trade, and China is the most important source of this growth.At the same time, Apple's recent income early warning also explains everything. China's impact has become the main bottleneck factor for global supply.
The impact on the demand side is also important.After all, China has become the largest source of external demand for most Asian economies.Unexpectedly, trade data between Japan and South Korea in early 2020 showed obvious weak signs of weakness.Therefore, it can be determined that Japan will record negative GDP growth for two consecutive quarters, which has led to a three -time increase of consumption tax (1997, 2014 and 2019).
The shortage of Chinese demand may also cause serious blows to the original weak European economy (especially Germany), and may even have a negative impact on the US economy that seems to be insulated from recession, because China is actually the third largest and fastest export market in the United StatesEssenceIn this regard, the sharp decline in the U.S. purchasing manager index in February implied this possibility and confirmed the long -lasting old saying: No country can be alone in the faltering global economy.
In the final analysis, epidemiologists will have the final decision in the end of the crown disease epidemic and its economic impact.Although this discipline far exceeds my professional knowledge, I feel that the current coronary virus strain seems to be more contagious than the SARS virus in early 2003, but the mortality rate is lower.
17 years ago, I was in Beijing when I broke out. The panic caused by the epidemic at that time, as well as the uncertainty shrouded in the country still vividly.The good news was that the destruction at that time was temporary (nominal GDP growth fell 2%in the second quarter of the epidemic in 2003), and a strong rebound was achieved in the following four quarters.However, the situation was very different at the time.In 2003, China was prosperous. The actual GDP increased by 10%, and the world economy also achieved a 4.3%growth.For China and even the world at that time, the damage related to Shas was just a piece of cake.
Similarly, the current situation is not the same as at the time.The economy was much more fragile when the crown disease came.More importantly, this impact is concentrated on the most important growth engine in China.According to the International Monetary Fund's estimates, this year this this year in China ’s global output is 19.7%, which is more than double the 8.5%share of the Saus outbreak in 2003.In addition, given that China has contributed 37%of the world's GDP growth since 2008, and no other economy can fill this vacancy, there seems to be a high probability that the global recession will appear directly in the first half of 2020.
Of course, we will eventually go through this epidemic.Experts say that although the production of vaccines takes time (at least 6 to 12 months), the combination of warm and unprecedented epidemic prevention containment measures in the northern hemisphere may mean that the infection rate will begin to decline after reaching the highest point in the next few months.
However, the economic reaction will undoubtedly lag behind the virus infection curve, because premature relaxation of the isolation area and travel restrictions may stimulate a broader wave of crown disease.This means that China will have at least two quarterly economic growth gaps, which is twice the duration of the Shas period, leading to its annual growth goal of 6%in 2020, and there may be a gap of up to 1 percentage point.China's recently introduced stimulus measures are mainly focusing on the economic rebound after the epidemic lifting, which cannot offset the impact caused by the current severe restrictions.
This is irrelevant to the optimistic consensus of investors. After all, impact is just a temporary destruction of potential trends.Although people are trying to use this reason to ignore this current impact, the key is to pay attention to its impact on potential trends.When the crown disease is coming, the world economy is weak, and it will only become weaker and weaker.
Therefore, the V -shaped recovery trajectory of the Shas incident will be difficult to copy, especially when the currency and financial authorities in the United States, Japan and Europe have rarely ammunition at hand.Of course, this has always been the biggest risk.In the days when you clamoring for the past, for this financial market that has long been full of complacent emotions, China's sneezing is like a good head.
Author Stephen S. Roach is a senior researcher and senior lecturer in Yale University in the United States, and former chairman of Morgan Stanley Asia. It is authorized to have imbalances: the book of the United States and China (UNBALARANCED: The CodePependency of America)
English Title: When China Sneezes
Copyright: Project Syndicate, 2020
