Will East Asia Win the Pandemic?
Investors and analysts seem confident that East Asian countries will be able to keep COVID-19 in check, achieve robust economic recovery, and maintain stimulus measures, leading to ever-higher corporate profits and, in turn, stock prices. Perhaps they should take a cold shower.
SEOUL – East Asian countries have done remarkably well in managing the COVID-19 pandemic and limiting its economic repercussions. But, given that significant risks and uncertainties remain, it is far too soon to say that the region will emerge from the crisis as a global winner.
East Asia’s pandemic record is undoubtedly impressive. In 2020, more than 101 million people tested positive for COVID-19, and over 2.1 million died globally. But thanks to strict containment measures and universal mask wearing, East Asian countries had far lower rates of coronavirus infections and deaths than the advanced economies of Europe and America.
Similarly, while the world economy contracted by 4.3% – the deepest downturn since World War II – developing Asia as a whole maintained positive GDP growth, buoyed by Taiwan, Vietnam, and especially China, which reported 6.5% annual growth in the fourth quarter. Rising external demand for technology, electronic goods, and medical supplies helped, by limiting the region’s export losses.