Page 36 - 2021 White Paper
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1 White Paper on the Business Environment in China
of other Republicans. On a related question, distancing also cause supply disruptions. On the
75% of Republicans who rely most on Trump demand side, layoffs and the loss of income (from
and his task force for coronavirus news said the morbidity, quarantines, and unemployment) and
outbreak had been made a bigger deal than it worsened economic prospects reduce household
really was, compared with 63% of Republicans consumption and firms’ investment. The extreme
who don’t rely most on Trump and the task force. uncertainty about the path, duration, magnitude,
Differences also emerge around whether various and impact of the pandemic created a vicious cycle
actors were getting the facts right during the of dampening business and consumer confidence
pandemic. Among Republicans who rely most on and tightening financial conditions, which lead to
Trump for coronavirus news, 70% said he and his job losses and investment (Chudik et al.).
administration got the facts right almost all or
most of the time. Among other Republicans, far Mark Zandi is the chief economist at Moody ’s
fewer (39%) say the same (Jurkowitz and Mitchell). and an analyst highly regarded by both US
political parties. He is a man not generally prone
Economic Ramification to hyperbole. In early March, Zandi immediately
reached for the metaphor of a devastating natural
While it was difficult to predict how the disaster to describe the toll that the pandemic
international financial markets would react to would take on commerce—the businesses it
Covid’s impacts, what the markets did suggest would destroy, the jobs it would wipe out, the
shortly after the first Covid case crossed the US retirement nest eggs it would crack and shatter.
shoreline was a world that was extremely anxious. That there will be economic pain was already
There was a degree of anxiety in late February clear. By May 2020, the stock market lost more
that was well beyond the health scares. To counter than one-third of its value, giving up all of the
these fears, “Governments need to spend at this considerable gains it made since President Donald
point in time to prevent the kind of meltdown Trump took office in 2017. The urgent call for
that could be even more damaging than the one social distancing across much of the country
that is likely to take place over the course of the forced the closure of just about any business
ye a r,” R i c h a rd K oz u l -Wr i g ht, D i re c to r, D i v i s i o n where human beings congregated. The restaurant,
on Globalization and Development Strategies live-entertainment, tourist, and airline industries
at UNC TAD, insisted. One “Doomsday scenario” were being crushed. Public and private mass-
in which the world economy grew at only 0.5%, transit systems—many already unprofitable—
would involve “a US$2 trillion hit” to gross began facing budgetary crises. State and local
domestic product, he said, adding that collapsing governments, legally required not to run a deficit,
oil prices had been “a contributing factor to that would soon be overwhelmed both by the strain
growing sense of unease and panic.” Kozul-Wright on their public-health systems and by the ensuing
said it was important not to let grim milestones burden on their balance sheets. Yet the full scope
such as passing the infection rate of 100,000 of the economic ramifications of the coronavirus
worldwide, sap resolve to contain the disease, was, like its cascading effect on the health-care
stressing that 93% of deaths at that point been in system, only just beginning to become apparent.
just four countries. It would be “the first pandemic Goldman Sachs was expecting a 24% drop in the
in history that could be controlled. “The bottom second quarter. To put the data in perspective:
line is, we are not at the mercy of the virus,” he These second-quarter forecasts would mean the
added (UN). deepest, fastest drop in economic activity since the
government began calculating the nation’s GDP on
The Covid-19 pandemic was a global shock ‘like a quarterly basis in 1947. Before that, the worst
no other ’, involving simultaneous disruptions to three-month plunge was 10% in early 1958, which
both supply and demand in an interconnected happened to coincide with a flu pandemic that
world economy. On the supply side, infections began the year before. Under the Goldman Sachs
reduce labor supply and productivity, while estimate, the jobs gone would total 14 million. By
lockdowns, business closures, and social comparison, a rough total of about 8.7 million jobs
disappeared in the Great Recession, but those
36
of other Republicans. On a related question, distancing also cause supply disruptions. On the
75% of Republicans who rely most on Trump demand side, layoffs and the loss of income (from
and his task force for coronavirus news said the morbidity, quarantines, and unemployment) and
outbreak had been made a bigger deal than it worsened economic prospects reduce household
really was, compared with 63% of Republicans consumption and firms’ investment. The extreme
who don’t rely most on Trump and the task force. uncertainty about the path, duration, magnitude,
Differences also emerge around whether various and impact of the pandemic created a vicious cycle
actors were getting the facts right during the of dampening business and consumer confidence
pandemic. Among Republicans who rely most on and tightening financial conditions, which lead to
Trump for coronavirus news, 70% said he and his job losses and investment (Chudik et al.).
administration got the facts right almost all or
most of the time. Among other Republicans, far Mark Zandi is the chief economist at Moody ’s
fewer (39%) say the same (Jurkowitz and Mitchell). and an analyst highly regarded by both US
political parties. He is a man not generally prone
Economic Ramification to hyperbole. In early March, Zandi immediately
reached for the metaphor of a devastating natural
While it was difficult to predict how the disaster to describe the toll that the pandemic
international financial markets would react to would take on commerce—the businesses it
Covid’s impacts, what the markets did suggest would destroy, the jobs it would wipe out, the
shortly after the first Covid case crossed the US retirement nest eggs it would crack and shatter.
shoreline was a world that was extremely anxious. That there will be economic pain was already
There was a degree of anxiety in late February clear. By May 2020, the stock market lost more
that was well beyond the health scares. To counter than one-third of its value, giving up all of the
these fears, “Governments need to spend at this considerable gains it made since President Donald
point in time to prevent the kind of meltdown Trump took office in 2017. The urgent call for
that could be even more damaging than the one social distancing across much of the country
that is likely to take place over the course of the forced the closure of just about any business
ye a r,” R i c h a rd K oz u l -Wr i g ht, D i re c to r, D i v i s i o n where human beings congregated. The restaurant,
on Globalization and Development Strategies live-entertainment, tourist, and airline industries
at UNC TAD, insisted. One “Doomsday scenario” were being crushed. Public and private mass-
in which the world economy grew at only 0.5%, transit systems—many already unprofitable—
would involve “a US$2 trillion hit” to gross began facing budgetary crises. State and local
domestic product, he said, adding that collapsing governments, legally required not to run a deficit,
oil prices had been “a contributing factor to that would soon be overwhelmed both by the strain
growing sense of unease and panic.” Kozul-Wright on their public-health systems and by the ensuing
said it was important not to let grim milestones burden on their balance sheets. Yet the full scope
such as passing the infection rate of 100,000 of the economic ramifications of the coronavirus
worldwide, sap resolve to contain the disease, was, like its cascading effect on the health-care
stressing that 93% of deaths at that point been in system, only just beginning to become apparent.
just four countries. It would be “the first pandemic Goldman Sachs was expecting a 24% drop in the
in history that could be controlled. “The bottom second quarter. To put the data in perspective:
line is, we are not at the mercy of the virus,” he These second-quarter forecasts would mean the
added (UN). deepest, fastest drop in economic activity since the
government began calculating the nation’s GDP on
The Covid-19 pandemic was a global shock ‘like a quarterly basis in 1947. Before that, the worst
no other ’, involving simultaneous disruptions to three-month plunge was 10% in early 1958, which
both supply and demand in an interconnected happened to coincide with a flu pandemic that
world economy. On the supply side, infections began the year before. Under the Goldman Sachs
reduce labor supply and productivity, while estimate, the jobs gone would total 14 million. By
lockdowns, business closures, and social comparison, a rough total of about 8.7 million jobs
disappeared in the Great Recession, but those
36
