Economics: Coronavirus - What Doesn`t Kill China Will Make It Stronger

 (Drivebycuriosity) - "May you live in interesting times" says an old Chinese curse.  These days the People`s Republic is suffering interesting times in truth. The coronavirus - and the drastic measures against it - stopped the economy around Wuhan and other regions. Many people got quarantined and weren`t able to work, to shop, to commute & to travel. But I also believe in another proverb:   Friedrich Nietzsche said "What doesn`t kill me, will make me stronger".

The virus won`t destroy China. The country is way to big and to complex and had survived many challenges over 5 millenials. The number of new infections are already falling sharply and people are returning to their workplaces. iPhone producer Foxcon is offering free transportation to and from work, complimentary meals and accommodation, and bonuses of up to $1,000 to factory workers who earn as little as $4,000 per year. The experience from the SARS epidemic in 2002, which did not stop China´s growth, is encouraging.

China`s economy might even get stronger when the corona crisis has past. History shows that consumer and businesses are more willing to change behavior during setbacks (twitter). Innovations typically gain traction during tumultuous times: they get cheaper, faster, more convenient, more productive, more creative. The government already started a massive economic stimulus program to compensate the economic damages done by the epidemic, including several interest rate cuts and tax reductions (ing.com). Companies are streamlining operations and are getting more efficient & productive as they always do when they are challenged.

Because people were forced to stay at home they used the internet for work, shopping and other activities more intense. This way the virus will boost the digitization process which already has been driving China`s transformation process on her way to become a modern economy where most of the national GDP is created by the service sector (like the USA, UK, Germany and other Western countries). The digitization will drive productivity growth across all industries, leading to more  economic (driveby).

Alibaba`s CEO Daniel Zhang sees opportunities created by the forces of change ( seekingalpha). He reports that "17 years ago, the e-commerce business experienced tremendous growth after SARS. We believe that adversity will be followed by change in behavior among consumers and enterprises and bring ensuing opportunities". Zhang continued that "we have observed more and more consumers getting comfortable with taking care of their daily living needs and working requirements through digital means...Many, many consumers they change their way of living and for many offices many workers they change the way of how to work. So people now work remotely from home. People buy foods, buy fresh products, buy groceries, buy necessities from home".

Zhang declares that "after all is done, I would expect that this is an inevitable trend that more and more business and more and more customers will have a digital life or digital working style. So this obviously will -- in the long-term will be good for the digital pace of the whole society".

I assume that the digitization process, which is obviously spurred by the corona epidemic, will make China´s economy more modern and more efficient and will raise the productivity of China`s companies and so encourage economic growth (reuters).