IT is tragic that some people are affected by the coronavirus disease 2019 (Covid-19), but in China, there are 21 provinces with just one or two virus-infected persons who have passed away in each province. These include Zhejiang with 55 million inhabitants, Guangxi with 46 million and Tianjin with 13 million. It illustrates how limited the outbreak in China really is. The epicenter, of course, is the province of Hubei, where the Covid-19 outbreak will certainly reduce its economic growth significantly. However, Hubei’s economy represents only 4 percent of China’s overall economy.
Thus, it is not the economic consequences for Hubei that was the reason behind the sell-off on the stock exchanges on Wall Street and in Shanghai from February 19 to the following week. The statistical data from China about the development of Covid-19, which is also recognized by the World Health Organization, indicates that the outbreak may have peaked there. Furthermore, it is my expectation that a growing part of China is on its way back to normal.