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MARCH 2020 FORBES ASIA
SECTIONne cannot cover the business scene in Asia
these days without highlighting the chal-
lenge presented by the outbreak of the coro-
navirus (officially Covid-19) for the region’s
entrepreneurs, companies, governments
and economies. Just one example: Hong Kong’s financial
secretary recently said the outbreak could deal a “tsunami-
scale blow” to the city’s economy.
The Covid-19 outbreak will also have a negative impact
on the global economy. The worst-hit areas are in and
around Wuhan, China, the source of the virus, but the im-
pact is being felt acutely across most of Asia—and indeed
the global economy.
The most obvious industries being affected are airlines,
retail, F&B, hospitality and tourism. Insurance will no
doubt take a big hit from various claims. Then there’s the
stress put on the medical industry—a major problem is the
lack of a vaccine to help prevent its spread. Thankfully, the
mortality rate for Covid-19 is much lower than for SARS,
but it also seems more contagious.
As many commentators have noted, the increasingly glo-
balized world, with its complex supply chains, trade routes
and air traffic, can enable the virus to spread as fast as it can
also move people, goods and services. Governments and
international organizations, for the most part, have been
swift to implement measures to try to contain the spread of
the virus, building on lessons learned in previous episodes
with the H1N1 virus and other contagions. Companies have
installed business continuity plans, which typically include
steps such as more telecommuting, business travel restric-
tions and cancelling face-to-face meetings. Everywhere
people are taking precautions, such as elbow bumps in-
stead of handshakes, and avoiding crowded areas.
It is possible that the virus, similar to others before it,
will burn itself out in a few months. Yet even if there is a
return to normalcy by the summer, the global economy will
still need time to recover—companies will take a hit in their
first-half results, and governments will take one in growth
rates and tax revenues.
JUSTIN DOEBELE
EDITOR, FORBES ASIA[email protected]Sidelines
STRESS TEST
O
The outbreak highlights a truth about the emerging cen-
trality of China. Given the greater role that China now plays
in the global economy—in such areas as trade, technology
and consumption—then what affects China will increas-
ingly have a broader effect on everyone.
The old adage that health is wealth is never truer than
today. While some predicted China would produce another
virus after the SARS crisis, the timing, severity and origin
cannot be foreseen. Covid-19 is a stark reminder of the
power of black swans, those unwelcome and, by definition,
unexpected events that can have significant consequences.
It is a global stress test, which one hopes the world can
soon pass. As always, any comments welcome at editor@
forbesasia.com.