Still Too Early to Predict Depth of Economic Downturn
In March 2020, California entered a state of emergency due to the outbreak of coronavirus pandemic, and the first death was reported in the state on March 4. As of the afternoon of March 16th, all 50 states in the United States and Washington DC., had declared a state of emergency due to the spread of the epidemic. The panic caused by the virus was soon reflected in capital markets.
In mid-2019, people were excited to think that the US stock market had climbed to an “unshakeable” position. The stock index hit a record high, with a ten-year increase of 322%. But the debate over whether the market was overvalued continued until February 2020. After mid-February, global stock markets plummeted under the influence of the spread of the epidemic and the plunge in oil prices. Starting from January 1, 2020 and closing on March 12, European and American stock markets generally fell by more than 20%, entering a technical bear market. Short-term panic combined with structural imbalances makes it impossible for anyone to predict when U.S. stocks will return to stability and whether this will be the first inkling of another global depression.
China’s Central Bank Unlikely To Pursue Negative Interest Rates
In this eventful March, the novel coronavirus epidemic spread globally, forcing central banks of major powers to start a massive wave of interest rate cuts. On March 15, in the United States, the Federal Reserve announced an emergency rate cut for the second time this month, cutting interest rates by 100 basis points and launching a $700 billion scale-up easing plan. Many countries followed suit.
At the same time, as global interest rates continue to fall, the People’s Bank of China is also working to stabilize its monetary policy. On March 16, the People’s Bank of China implemented a new policy releasing 550 billion yuan of long-term funds. The reduction of the basic loan interest rate only reduces the price of the asset side. To further reduce the actual financing costs, the debt side burden needs to be reduced simultaneously. But some of the experts believe that China will not move to negative interest rates, and China may also be the only major economy where its central bank stays away from negative interest rates.
Next Major Threat of Coronavirus Is Infected Cases from Abroad
As the domestic epidemic of novel coronavirus has been under control, imported cases have become a major risk. Recently, major ports in Beijing, Shanghai, Hong Kong and other places have successively upgraded prevention and control measures. On March 19, Beijing introduced a new rule that all personnel entering Beijing must be sent to a centralized observation point for 14 days of medical observation at their own expense.
The differences in epidemic situation and epidemic prevention policies in other countries have brought new challenges to China’s epidemic prevention and control. This also means that the domestic anti-epidemic situation has entered a new stage. Some areas in foreign countries are facing the outbreak while China ’s national virus control has achieved positive results. Some Chinese people abroad feel safer at home and decided to return home, which increases the risk of foreign imports. Some analysts believe that Beijing for example is trying its best to prevent “potential sources of infection” from making the situation worse.
Patients’ Need for Dialysis Treatment Neglected Amid Pandemic
The once severe epidemic of the novel coronavirus epidemic caused some hospitals in Wuhan to close the dialysis rooms quickly because of fear of possible cross-infection, and some hospitals were understaffed due to medical staff being transferred to reinforce other hospitals. In some other cases, the dialysis rooms were converted into isolation wards. This has caused many patients who need dialysis treatment to be unable to seek medical treatment in time. There are more than 7,000 such patients in Wuhan, and their quality of life has plummeted.
Looking back at the chaos of the previous months, doctors generally reported that if there is a plan and experts participate in decision-making, the government will know that the patients in need of dialysis may be severely affected in the epidemic situation, and perhaps some arrangements can be made in advance.