Wuhan coronavirus outbreak could be a ‘black swan’ that hurts retail sales, tourism in mainland China as Lunar New Year travel ramps up
- Beijing likely to undertake additional policy easing to offset any shock from the virus, UBS’s investment bank says
- Busy Lunar New Year travel period presents a ‘tremendous challenge’
Timothy Moe, chief Asia-Pacific equity strategist at Goldman Sachs, said the world is a “much more connected place” than it was during the severe acute respiratory syndrome (Sars) epidemic in 2003, so there’s more vectors of potential transmission than in the past and markets have responded to the potential downside risk in recent days.
“What makes this concerning and hard to handicap is that nobody really knows exactly how this is going to turn out, which really is why it’s that proverbial black swan,” Moe said. “There certainly are reasons to be concerned, just citing the already published facts, which is that it’s now seen to be communicable between humans. We’ve seen how these things can propagate.
“There’s a concern that this is coming just before the Chinese New Year when you tend to get very significant amounts of migration within China and also between China and other areas.”
The outbreak has emerged at the height of the Lunar New Year travel season where some 3 billion trips are expected to be made by Chinese residents over the 40-day holiday period, which runs to mid-February.