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Coronavirus water the Lunar New Year party and torpedoes Chinese GDP

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40 million people locked up. This is how China faces its expected Lunar New Year. The coronavirus he checks these celebrations and his contribution to the economy of the Asian giant equivalent to that of the Thanksgiving Day and the Christmas for the US Combined. Since S&P, the credit rating agency, put the country on notice: the epidemic can torpedo its GDP and reduce its growth by up to 1.2% this year.

"The virus is attacking China during its New Year, a period in which households spend more on travel, entertainment and gifts," he says. Shaun roache, chief economist for the Asia-Pacific region in S&P.

China must respond. Those of Xi Jinping They can amortize the blow. Partly. And that happens by "raising public spending on health personnel, emergency services and vaccines."

Consumption contributed 3.5% to the growth of GDP Chinese in 2019. S&P forecasts that 10% may fall which, in turn, would reduce GDP of the Asian giant in approximately 1.2%.

More than 3,000 million trips. Only in the Lunar New Year of 2019. This is the baggage of Chinese citizens. In 40 days they traveled the same as the Americans on Thanksgiving Day multiplied by 25.

"Some will be infected and in the middle of the trip so it will be difficult to find an effective way to control them," he acknowledges. Zhong Nanshan, one of the experts who led the investigation of SARS in 2003, in statements to Bloomberg.

SARS ALREADY RUNNING 2% OF GDP IN 2003

Everything changed in China. That pandemic closed schools. People stopped traveling. Eating out. And to go shopping. Public places became a threat. The retail sales of the Asian giant sank to historic lows. And his GDP He paid dearly by growing 2% less in that quarter.

"If we take the SARS as a reference, this coronavirus can lead to a sharp fall in tourism, "he says Tommy Xie, economist of OCBC Bank to the American medium. "It will also affect the collection of cinemas, restaurants and consumption in general," he acknowledges and anticipates that "The first quarter of the year can take the worst part."

IS IT A GOOD TIME TO INVEST?

Julius Baer He has advised investors to take advantage of the coronavirus outbreak to invest in Chinese equities, while this outbreak "does not change" the "constructive" medium and long-term vision of Chinese stocks. "We are inclined to buy for weakness in the stock market at this stage," said the strategist of Julius Baer, Mathieu Racheter, in an analysis submitted this Friday.

Since the first detection, the index CSI 300 and the index Hang Seng they have fallen 3.6% and 3.9%, respectively. Also, the concern that the coronavirus can spread globally hcaused a slowdown in risk appetites.

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