Economics: Lessons From COVID-19 Crisis - Are The Swedes Too Complacent?

 (Drivebycuriosity) - There is a rising political pressure to open the economies again. Some countries and some states in the US started to ease the severe lockdowns. The backers of a re-opening - and often massive critics of the lockdowns - refer to Sweden. The Scandinavian country goes her own way. Sweden refused to lockdown and keeps factories, shops, ice cream parlors, hairdressers, gyms, schools & kindergartens open. How are they doing?

Today in Sweden about 16% of the tested are positive and the country has 233 deaths per 1 million population (worldometers ). In neighbor country Finland just around 5% of the tested are positive and the country has 36 deaths per 1 million population. In Norway are 5% positive tested and there 38 deaths per 1 million population.

Obviously the situation in Sweden is much worse than in the neighbor countries which have a similar population. The Scandinavians are not known for a lot of kissing & hugging like Italians, French or the French. The Scandinavian culture stands for a more restrained, coolish & disciplined behavior which constraints the spread of viruses. All 3 countries have a very low density which also reduces the infection risks (wikipedia).

 ( worldometer )


Unfortunately the numbers of new cases & deaths in Sweden are still rising fast - about 3% daily (see also spiegel.de/wissenschaft). Much faster than in Norway and Finland. How long can Sweden hold on?.

Science Fiction: Dark Orbit By Carolyn Ives Gilman

 (Drivebycuriosity) -  I love science fiction. But I get often disappointed. Most of the so-called sci-fi books and movies tell just fantasy stories about wizards, dragons & princesses or post-apocalyptic horror stories. It became increasingly challenging to find real "science fiction", stories & novels which have science in it and are not pure fairy tales. So I am searching for hard science fiction which blends entertainment with sciences like physics, chemistry, biology, evolution and more.

I discovered Carolyn Ives Gilman because I enjoyed her idiosyncratic short story "Touring with the Alien"where a woman travels together with an alien in a near future USA (published in "The Year`s Best Science Fiction - Thirty-Fourth Annual Collection by Gardner Dozois” here my review ) and I indulged in her masterpiece "Umbernight". Human settlers on an inhospitable planet are hiking through unknown land to capture something they need. The hikers have to deal with a bizarre & deadly environment - a thrilling adventure story (published in "The Best Science Fiction of the Year Volume 4" by Neil Clarke. My review ).

These short stories drew my attention to her novel "Dark Orbit" ( amazon). Again Gilman sets an adventure story into a bizarre environment. A team of scientists are send to a space ship which orbits a newly discovered planet where they observe weird physics. The baseline and the first 50% pages are fascinating and kept me on the edge, but then author started to meander the story more and more till she lost the control. I doubt that she knew in the final what she wanted to write about. What a pity.

The early parts of the book are a felicitous mix of physics, especially cosmology, and entertainment. I enjoyed the beauty of her language: "As they orbited into day, the planet below became a shimmering mass of tinsel. The surface was a sea of reflections stirred by the wind". I loved the depiction of the weird spaceship, called "Escher" (named after the surrealist images by M.C.Escher),  and indulged into her wonderful description of quantum physical phenomena:
“The physicist spoke as if they had created two entangled particles, born and split in the same instant, that continued to influence one another across whatever distance separated them. But in fact, it might be that they had only separated two aspects of the same particle, existing simultaneously in two spots, and resonating back and forth. To detect the particles directly would destroy the effect by freezing them into existence in one spot. Until then, they had only potential existence in both spot. In this unresolved state it was possible to use them to communicate by observing their indirect effects on the magnetic field mourned them. But the magnetic bottle was like Pandora´s box - a thing they were forbidden to peak in for fear it would make their particles real”. This is the most poetic writing about the weirdness of quantum physics I have ever read. Stephen Hawkins meets Arthur C. Clark.

Later she focused on the discovered planet,  apparently influenced by her professional experience as historian who works as a curator of the National Museum of the American Indian in Washington D.C.. Unfortunately she tried to blend anthropology with quantum physics which lead to an inedible mixture. Humans - and their environment - appeared and disappeared like some atomic particles.

Apparently Gilman`s strengths lies more in are writing short stories - and  maybe novellas.

Economics: Oil Price - Back To Normal!

 (Drivebycuriosity) - There is a lot ado about the recent crash on the oil market.  But the chart above shows that the price of oil fell just back on the levels of the 1990s. Brent Crude, the international gauge for oil, is now trading around $20, like in the period 1985-2000 ( tradingeconomics ). Low oil prices in the 1990s fueled a period of dynamic economic growth, Bill Clinton`s economic boom run partly on cheap oil. Climbing oil prices slowed economic growth in the decade 2000-2010 and the oil price spike from 2007/08, when the price of oil tripled, preceded the big recession of 2008. Decades with cheap oil are prosperous, decades with expensive & volatile oil (like the 1970s and the 2000s) are not.  "

There are 2 reasons for the return of the oil price to the long term level, the normal. The rise of US oil production, thanks to fracking, which lifted the global oil supply, and the plunge of the demand for oil, caused by the lockdowns as a reaction to the COVID-19 crisis.


The return to cheap oil is a huge stimulus economic program - additional to the $6 trillion stimulus packages by the US government and the Federal Reserve - and helps to mitigate the carnage caused by the cornonavirus & the lockdowns. So far the demand for gasoline did not drop to zero in the US. The Energy Information Administration (EIA) reported that the weekly US gas demand decreased  to 5.1 million b/d (aaa). This time last year, drivers were using about 9.2 million barrels a day of gasoline (cnbc). According to these numbers about 60% of the economy is still burning gasoline and is already benefiting from cheaper energy!


Dropping prices for oil & gasoline work like a tax cut. Consumers worldwide have more money to spend for other goods & services. So cheaper energy prices stimulate consumer spending which accounts about 70% of the US economy. Dropping energy prices also translate into lower transport costs - thanks to cheaper Diesel - helpful for the still running supply chains for food and other necessary goods. The sharply falling energy prices are curbing inflation and reduce so the risk that the $6 trillion stimulus programs (government plus Federal Reserve loans) could lead to a hyper inflation.


As long as oil will stay cheap it will fuel the recovery in the 2nd half of the year.

Economics: Ending The COVID-19 Lockdowns - Canaries In The Coal Mine

 (Drivebycuriosity) - It seems the whole world is in a lockdown - with the exceptions of China & South Korea. But some countries in Europe and some states in the US may follow soon and will reopen their economies step by step. Sitting in Manhattan, the COVID-19 epicenter of the US where the lockdown has been extended through Mid-May, I am watching these experiments with rapt attention. These early openers will be canaries in a coal mine. If it turns out that the liberations will cause a second wave of infection because they were too soon and too fast, then other countries could be more cautious.

Germany plans to ease the lockdown step by step. German Chancellor Angela Merkel  announced plans to slowly ease restrictions brought in to tackle the coronavirus pandemic. Social distancing rules will stay in place until at least 3 May, with Ms. Merkel also recommending the use of face masks in shops and on public transport. But beginning Monday April 20 shops under a certain size could open their doors. And schools will gradually start to reopen from 4 May (bbc ).  Spain, one of the countries worst affected by the coronavirus pandemic, has already eased some restrictions and allows those who cannot work from home, such as those in the construction and manufacturing industries, to return to work (cnn). Around 300,000 nonessential workers are estimated to have gone back to their jobs in Spain's Madrid region on Monday April 13.  Denmark also opened schools and shops last week. Italy reopened some retail businesses as well — mainly shops selling books, stationery and children's clothes (nbcnews ). According to the media some Italian shop employees already complained that news of the government shutdown decision came suddenly and had not given them and others enough time to prepare. While other Italians fear a second wave as the lockdown is eased leading to a renewed nationwide shutdown.

I can understand the fears. Opening factories and shops can lead to crowds and some workers & customers may disobey the distancing rules. When I am shopping in Manhattan I often have to maneuver around people who ignore the social distancing rules and there are so many joggers on the streets who ignore the obligation to wear face masks. I am especially skeptical that reopening schools will be safe. I notice so many ruthless grownups in New York City who don´t care about the security of their fellow beings, so how could we expect social distancing from children?

It is also an open question how potential customers and workers will respond. Austria lifted restrictions on Tuesday April 13. Reporters from British paper "The Independent" observe empty streets and shops ( independent). They claim "shop owners are afraid that people will continue to stay away despite lifting of restrictions". In the US some factories were closed independently from government lockdowns. The meat processors Tyson Food and Smithfield Foods closed factories independently from each other because several workers there tested positive, General Electric shut down a wind power factory because employees became infected.

I hope that these experiments will go well, then other countries can follow and curtail the economic damages caused by the lockdowns.  Time will tell!

PS The image above shows a lonely shopper in Austria`s capital Vienna ( independent )

Netflix: Binge Watching Ozark

 

 (Drivebycuriosity) - Being trapped at home I have been binge watching "Ozark", all 3 seasons of the Netflix show (imdb ). "Ozark" comes up to "The Americans" and it is at least as good as "Breaking Bad". It seems that Netflix is catching up to HBO.

The plot circles around Martin Byrd, a rational & analytical thinking financial adviser & accountant - "The Numbers Guy". Martin came too close to a Mexican drug cartel and has suddenly to deal with an irrational, treacherous & vicious environment. Jason Bateman ist the perfect cast, he radiates a zen-like inner peace and behaves like the human eye of a hurricane.  I was fascinated by Laura Linney as well. She impersonated Martin`s wife Wendy, sometimes emotional and sometimes even more calculating than her husband. 


Julia Garner impressed me as a hyper-smart white trash & petty criminal who became a rising star in the Ozark universe; Janet McTeer will stay in my memory as the devil´s advocate, the cartel lawyer Helen, a cool & highly dangerous person;  I was entertained by watching Jason Butler Harner. He impersonates a FBI agent who is obsessed with the Byrds and the case; and I also enjoyed the performances of Lisa Emery & Peter Mullan as Darlene & Jacob Snell. “The Snells” are vicious & stubborn hillbillies who grow poppies for the heroin trade - no matter what.

These characters and many more are involved in a fascinating plot. Martin is forced to laundry a huge sum of money from the cartel in order to survive and to keep his family (wife & 2 kids) safe. The Byrds move from Chicago to the Ozarks, a remote resort area in US state Missouri, where Martin is working hard to invest the cartel money in local businesses which causes a sheer endless chain of complications  (this is a spoiler free blog. You could find a synopsis here wikipedia).

"Ozark" is a complex but highly entertaining show; a violent fable, full of surprises, grisly violence and drama but also spiced with some weird humor & romantics. I enjoyed cinematography and sound track as well. "Ozark" is the perfect escape in challenging times.

The show culminates with a wow-finale which makes me wonder if there will be a season 4? This depends on the popularity of the show, the ratings. So far I can see is "Ozark" very popular. Maybe the creators are already using the quiet lock down period to brainstorm and for video conferences about possible plot ideas. Time will tell.

Economics: Lessons From COVID-19 Crisis - We Need More Robots

 (Drivebycuriosity) - The COVID-19 crisis is radically changing the world as we know it. The lockdowns make life difficult for everyone.  Many industries are shut down,  supply chains are interrupted and many businesses are on life support.

We are told to stay at home, to avoid any contact. But we need to shop to be able to have breakfast and to cook. My wife and I tried to get home delivery from Whole Foods, but obviously many others got the same idea. No delivery spots were open, so are we forced to go there. And we need to go to other shops too. Shopping is scary these days. Too many people are there, are they infected? And what about the other customers?

It would help if we would had more robots.  What if we could order food from a robot shop which would be delivered by drones? Robots don´t get sick. They don´t spread the diseases, they don´t strike, they are trustworthy & reliable.

I think the whole economy will change in the coming months - and it has to. We don`t know how long the virus will be around and - even if COVID-19 goes away - when the next pandemic might come. The automation process -  which has been going on for more than a century - will suddenly accelerate. Automation has been lifting labor productivity for a long time which has led to climbing standards of living and more convenience. We will soon get many more machines. Amazon is already using some robots in their distribution centers and has opened shops which are fully automated - called Amazon Go. There are no lines, no checkouts, and no staff who could be endangered or endanger their customers. Other will follow, and maybe even overtake Amazon.

Today there is still a lot of resistance against the robotization. There are lot technophobes around. Luddites want to block the use of automates and hillbillies are shooting at drones. But I expect that the COVID-19-crisis will change the sentiment. Technology - including the Internet which is run by software - is making our life much easier. E-commerce, video-conferencing, home-learning and many other automated online services are helping us through the crisis.  I think the crisis could  temper the anti-tech sentiment and moderate regulation against drones, self driving cars and other robots.

Stock Market: Happy Easter 2020

(Drivebycuriosity) - It`s Easter again. It is a very different Easter, the world has changed extremely in the recent weeks. Instead of seeking for Easter eggs we are hiding from the virus. We are told to stay at home, to avoid any contact. Many industries are shut down,  supply chains are interrupted and many businesses are on life support. COVID-19 and the measures against it killed the 11 years old bull market and caused a wave of panic selling on the stock market. There was talk that in the US 50 percent will be infected and everything will be shut down for many months. Temporarily the S&P 500, the gauge of the US stock market, crashed more than 30% from the all-time-high from February 19.

In the recent days the S&P 500 rallyd again and regained about half of the losses. The recovery rally is driven by encouraging news from the COVID-19 front which overrides the grim economic date. In the US and many other countries the curves are flattening (new cases, hospitalized persons, deaths) - thanks to lockdowns, self-quarantines, social distancing, hand-washing etc. Governments are already talking about gradually lifting the restrictions. We are getting reports about the emergence of very effective therapeutic drugs (e.g., hydroxycloroquine, Azithromycin, zinc), many firms & university institutes are working on multiple vaccines and the traditional flu season is ending - thanks to better weather. The rally is also fueled by the $2 plus trillion stimulus packages from the government. And the Federal Reserve started to add about $4 trillion by giving loans & purchasing bonds.

With some luck an economic recovery could start in May. The second half of the year could show an economic boom starting in the third quarter. There is a huge backlog demand. People are tired from sitting quarantined at home, they will be happy to go back to work and to visit shops, bars, restaurants. The recovery will be still be fueled by the $6 trillion plus stimulus tsunami which works as financial steroids. There also will be strong tailwinds from record low interest rates  and oil prices are still much lower than at the start of the year.

Happy Easter!

Books: Invisible Planets Curated By Ken Liu

(Drivebycuriosity) - Coronacrisis or not, China`s star is rising. There are about 1.3 billion people who are gaining more global influence, not alone because of their sheer number. Such a huge country has a legion of talented people of course. No wonder that China`s contemporary literature is getting more and more interesting and important. The anthology "Invisible Planets",  curated by Ken Liu, gives an glance into China`s contemporary fiction (amazon). The anthology is a mixture of science fiction, fantasy & speculative literature. Unfortunately the curator has a bias for fairy tales and gives the speculative parts too much room for my taste.

There are just 2 real sci-fi stories, both are by Liu Cixin, the Chinese superstar who wrote the "Remembrance Of Earth`s Past" trilogy, also known as "The Three Body Problem" (my review ).  His story "Taking care of God" relates to the "Remembrance" universe and touches issues like religion, history, evolution and inter-generational  responsibility.  Cixin`s story "The Circle" is a fable about military strategy and the basic of computers. Both stories are strong enough to justify to read this book.

The rest of the stories are speculative fiction and fairy tales.  I enjoyed Tang Fei´s (image above) story "Call Girl". We follow Xiaoyi, who delivers services to wealthy men. It is unclear what she actually does, but it is not what the title lets expect. I enjoyed Fei`s poetic style and sentences like "there`s no sound around her. Sunlight slices across her shoulders like a knife blade". Curator Liu did a fine job as translator.

Chen Qiufan delivers 3 interesting stories. I indulged into the unique aesthetic of "The Fish of Lijang" & "The Flower of Shazui". Chen`s "The year of the Rat" is a somewhat surreal tale about soldiers who are fighting genetic modified rats, who seem to become intelligent.

The collection includes Hao Jingfang`s speculative fiction novella: "Folding Beijing", which won the Hugo Award in 2016. According to Wikipedia it took her around one month to plan, and 3 days to write (wikipedia ). "Folding" is a piece of absurd dystopian literature. Her Beijing has a population of 80 million people, who are separated in 3 classes. They are all living in the same area but in  3 different time zones. When one time zone ends and another starts, the whole citiscape, streets, places, parks, skyscrapers and other buildings, gets folded, packed away (! ) and replaced by a new citiscape. The basic idea, which reminds me of pop-up-children books, Brothers Grimm`s fairy tales & Escher`s paintings, is fascinating. Unfortunately Jingfang entangled her concept with a dull story line and crude economics (you can find a synopsis here  Beijing). The book includes also her essay "Invisible Planets" which touches topics like evolution, politics, sociology and more.

I could do without the rest of the fairy tales. There are three paranormal stories by Xia Jia:  "A Hundred Ghosts Parade Tonight"; "Tontong`s Summer" & "Night Journey of the Dragon-Horse". They are all too conservative for my taste.
And I disliked Ma Boyong`s "The City of Silence", a tedious mixture of Kafka & the novel 1984. Hardly digestible.

The book ends with three essays about contemporary Chinese science fiction written by 3 authors (Liu Cixin, Chen Qiufan & Xia Jia ). Liu Cixin describes science fiction "as a literature of possibilities. The universe we live in is also one of countless possibilities". He reports "as modernization accelerated its pace, the new generation of readers no longer confined their to the narrow present as their parents did, but were interested into the future and the wide open cosmos. The China of the present is a bit like America during science fiction`s Golden Age, when science and technology filled the future with wonder, presenting both great crises and grand opportunities".

"Invisible Planets" is entertaining & thought provoking but the book leaves the appetite of a science fiction aficionado unsatisfied.

Stock Market: Why The Shortest Bear Market In History Ended After Just 4 Weeks

(Drivebycuriosity) - Yesterday the shortest bear market in US history ended - after just 4 weeks, beating the bear market of 1990, which lasted 3 months ( apnews ). Yesterday the S&P 500, the gauge for the US stock market, closed on 2,749.98 points, 22.9 percent above the low from March 23  -   2,237.40 points. A bear market ends and a new bull market starts usually when the S&P 500 gains at least 20 percent. The bear market began on Thursday March 12 when the S&P 500, the gauge for the US stock market, plummeted to 2,480.64 points and finished the day more than 20 percent  below the all-time high from February 19 (actually 26.7%) .

(source )

The fast recovery wasn`t a surprise.  Stock markets often snap back after an extreme fall (chart above). It seems there is an invisible rubber band. It sounds like a paradox, but the deeper and the faster stocks drop, the sooner a bear market ends. This phenomena can easily be explained. In the final bear phase the market often overshoots - driven by panic & accelerated no thanks to short selling. Hedge funds and other speculators borrow stocks only to sell them immediately as a bet on lower prices. But suddenly the panic wave rolls over,  bargain hunters are attracted by sharply reduced prices & valuations, short sellers start buying back, new information dampens pessimism, people become tired of listening to the prophets of doom and panic will ebb down.

 ( source)

(source )


The March crash was driven by a very gloomy sentiment. There was talk that in the US 50 percent will be infected and everything will be shut down for many months. Not anymore. The recovery rally is driven by encouraging news from the COVID-19 front which overrides the grim economic date. In the US and many other countries the curves are flattening (new cases, hospitalized persons, deaths) - thanks to lockdowns, self-quarantines, social distancing, hand-washing etc. Governments are already talking about gradually lifting the restrictions. We are getting reports about the emergence of very effective therapeutic drugs (e.g., hydroxycloroquine, Azithromycin, zinc), many firms & university institutes are working on multiple vaccines and the traditional flu season is ending - thanks to better weather.

The rally is also fueled by the $6 trillion which government and Federal Reserve are pumping into the US economy. There is a long catalogue of measures ( reuters  marketwatch). A lot of US tax payers will receive a direct payment of $1,200, with additional payments of $500 per child. The millions who lost their jobs - or will in the coming weeks - will start getting additional unemployment benefits from the federal government. Small businesses will have access to $350 billion in forgivable loans. There are programs for airlines and other big corporations and much more. And the Federal Reserve started to add about $4 trillion by giving loans & purchasing bonds.

With some luck an economic recovery could start in May. The second half of the year could show an economic boom starting in the third quarter. There is a huge backlog demand. People are tired from sitting quarantined at home, they will be happy to go back to work and to visit shops, bars, restaurants. The recovery will be still be fueled by the $6 trillion stimulus tsunami which works as financial steroids. There also will be strong tailwinds from record low interest rates. Oil prices are still much lower than the start of the year.

The stock market is always forward looking. As soon as the market notices that things don´t get worse - it will recover!

Economics: What Is Wrong With Cheap Oil?

(Drivebycuriosity) - Oil prices have been on a free fall. Recently WTI, the gauge for US oil, hit the $20 mark and Brent Crude, which represents international oil, dropped to $25. The oil price drop causes a lot ado. The US President himself tries to talk the cartel of oil producers, Opec, into cutting oil production and to raise oil prices again (cnn). It seems that many observers including Bloomberg, Reuters and other media outlets agree with an organized production cut. What is wrong with cheap oil?

(source )

 (source )

Today oil costs about the same as in the year 2003, in the 1990s and before 1973 ( charts above; the second chart is inflation-adjusted and on logarithmic scale). Low oil prices in the 1990s fueled a period of dynamic economic growth, Bill Clinton`s economic boom  run partly on cheap oil. Falling oil prices made the 2010s to a decade without a recession, continuous economic growth, a record low jobless rate & strong stock market gains (driveby).

The return to cheap oil is a huge stimulus economic program and a gift for the global economy. It  helps to smooth out the the carnage caused by the cornonavirus & the lockdowns. So far the demand for gasoline did not drop to zero in the US. The Energy Information Administration (EIA) reports that the weekly US gas demand decreased  to 6.7 million b/d. This time last year, drivers were using about 9.2 million barrels a day of gasoline (cnbc). According to these numbers about 70% of the economy is still burning gasoline and is already benefiting from cheaper energy. That goes along with a guessing by a Manhattan firm who estimates that the shutdown idled 29% of the US economy so far ( marketwatch).

Dropping prices for oil & gasoline work like a tax cut. Consumers worldwide have more money to spend for other goods & services. So cheaper energy prices stimulate consumer spending which accounts about 70% of the US economy. Dropping energy prices also translate into lower transport costs - thanks to cheaper Diesel - helpful for the still running supply chains for food and other necessary goods. The sharply falling energy prices are curbing inflation and reduce so the risk that the $6 trillion stimulus programs (government plus Federal Reserve loans) could lead to a hyper inflation.

Opec isn`t our friend. In 1973 the organization cut oil production drastically (wikipedia ) in order to punish the US and Western Europe's for their support of Israel`s Yom Kippur War against an alliance of Arabian states. Then the oil price quadrupled and jumped to $60 which caused the infamous oil crisis ( oil embargo). Oil stayed expensive until the early 1980s which caused sharp recessions and a decade of economic stagnation and a dormant stock market. In the 1980s Opec lost power and oil prices began to fall (chart above) which supported and a long period of economic growth. Rising oil prices after the year 2000 caused a period of economic stagnation.

Why do the President and many others take side with the oil cartel? Cartels are outlawed in the US. Antitrust laws prohibit that group of independent market participants collude with each other in order to improve their profits and dominate the market (wikipedia ). The American cartel ban aims to protect the consumers.  Doesn`t the President respect the law? The new pro-cartel attitude is somewhat fishy.  A lot of trust busters in the US are going against Amazon and other Big Tech companies, claiming that these companies act monopolistic and harm the economy (driveby). Why does the US government want to support an aggressive and unfriendly foreign cartel? If the government wants to protect the US oil producers (including the frackers) they could support them financially like they do with the airlines. I  wonder why should Putin cooperate with Trump and should help him to save America´s oil industry when the US is showering Russia with sanctions?

If the US is still based on law the politicians should forget about colluding with Opec.

Economics: Will China Lead Global Economy Out Of The COVID-19 Crisis?

 (Drivebycuriosity) - The global economy suffers a sharp economic downturn and Europe & the US are in a lockdown. But one country is already recovering: China. Since mid-march the People`s Republic is coming back to work, even the epicenter Wuhan is slowly coming back to normal. Many indicators, like daily truck flows, within-city travel index or cross-city travel index, show that normal economic activities in China have nearly resumed to the level prior to the epidemic  (seekingalpha). The return to economic growth is also reflected by China`s purchasing manager indices for manufacturing & service industry, very early indicators for economic activity, which both jumped back to normal (charts below).

 ( source )


The recovery is fueled by a massive economic stimulus program, including several interest rate cuts and tax reductions (ing.com  reuters). China gets also a lot headwinds from historical low oil prices, which reduce the cost for transporting significantly and curb inflation (chart below).

 ( source)


It looks like that China`s economic growth will bounce back in this quarter - driven by an enormous backlash demand. China`s fresh growth cannot fully compensate the sharp downturns in the US & Europa but it certainly will mitigate the global carnage. In the second half of the year, when the US economy - and maybe also the European - will grow again, strong Chinese economic growth could accelerate the speed of the global recovery.

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.  Companies are streamlining operations and are getting more efficient & productive as they always do when they are challenged.

People, who were forced to stay at home for a while, will use the internet for work, shopping and entertainment more often & 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 growth (driveby).

Alibaba`s CEO Daniel Zhang sees opportunities created by the forces of change ( seekingalpha). He reported 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 change their way of living and for many offices many workers 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).