Everyone is looking forward to getting back to normal. When we all emerge from the lockdowns and social restrictions of the coronavirus pandemic , there will certainly be pent-up frustration waiting to be released. We look forward to returning to our favourite restaurants, going down to the pub, and getting back to work – all of which will help us recover economically and mentally. Economists have been discussing, or guessing, what the global recovery will look like. In economist speak, the recovery from a recession is described in terms of shapes. Optimists see a “V”-shaped snapback from the Covid-19 disruption. In this scenario, we will very quickly return to where we were six months ago. However, the number of optimists is dwindling fast, as the crisis is turning out to be more drawn-out than they originally expected. Less optimistic economists have been warning of a bumpy road ahead, perhaps including a second dip in equity prices, before a recovery begins. That recovery may look more like a “U” or a “W”. Plenty of examples of such recessions can be found in the 1970s and 80s. Pessimists see a long, slow, hard slog back to normal – an “L” shape, or a depression similar to that of the 1930s. ‘HELICOPTER MONEY’ To avoid the unthinkable and protect all of us from a repeat of the 1930s, governments and central banks worldwide have stepped in to support their economies with the old strategy of flooding the economy with money and dropping wads of free cash into ordinary folks’ laps – like the HK$10,000 cash handout from Hong Kong’s fiscal reserves this year. Some of the money handed out may in the short term go towards covering immediate expenses like rent or food. But in the longer term, with this year’s events burned into people’s memories, those that are able may prefer to save rather than spend, rendering “helicopter money” all but useless as an economic stimulant. What is missing from the various speculations about the shape of the recovery is that this is a very different crisis from anything that has happened in the past 100 years, or since the modern study of economics. The Covid-19 pandemic has revealed structural weaknesses in the way we go about things, suggesting that the economic theories that built the modern world are probably not all that helpful now. The notion that a deluge of money, pent-up consumer demand, and restarted factories will spark a recovery that neatly takes us back to where we were six months ago, is foolhardy. I, for one, cannot see myself going back to the way I lived last year, spending an extraordinary amount of time and money on planes, hotels and eating out in some of the most expensive cities in the world. I am worried about the future, and unlikely to spend my HK$10,000 frivolously. China consumer spending priorities changing due to pandemic When the system breaks down in the way we have seen this year, and we cannot go out to shop, retailers have no revenues and cannot pay the rent, landlords have no income and cannot meet their obligations, factories are offline because they are not being paid or cannot ship their goods, which in turn hits their suppliers and workers – the knock-on effects from this pandemic seems almost endless. Even online shopping, which is seeing a boredom boom now, will grind to a halt as savings are depleted, unemployment and debt skyrocket, and shoppers wake up to see the mountain of pointless things they have bought in past years. If we want to be prepared for another event like this, it is probably the wrong strategy to patch everything up the way it was. LIKELY WINNERS It seems that there will be stark differences between the rates of recovery in the United States, Europe including Britain, and Asia. The likely winners will be the countries which manage to come out of the crisis and return to some kind of normal with the least amount of new government debt. This suggests the regions of Asia and Australasia have the advantage, as there are clear indications that the infection rate is under control, as seems to be the case in Vietnam and South Korea . With the likely relocation of supply chains away from China, Southeast Asia in general should benefit. However, as Japan and Singapore have discovered, second and third waves of infection can hamper the recovery, requiring restrictions to be reimposed. That could leave Hong Kong in a favourable position. Despite the government’s dithering early in the outbreak even as the public called for border closures, Hong Kong got lucky with this one. As social restrictions start to get lifted, the local economy , which is based largely on consumption and property, can start the process of recovery. If it wasn’t for the promise of protesters returning to the streets, making Hong Kong’s commercial standing unclear, I would be a buyer. BUILDING VERTICALLY Asia should be the first region to see a recovery and with the likely relocation of supply chains away from China , Southeast Asia in general should benefit. With it comes the opportunity to reset supply chain relationships and vertically integrate with businesses that serve nearby markets and take advantage of rising incomes and a growing middle class. This could also lead to more beneficial relationships between investors, businesses, landlords and suppliers who may focus more on mitigating risk and surviving than being at each other’s throats in a crisis. Australia , in particular, appears to have woken up to the fact that it has a very weak supply chain, having sold most assets to Chinese companies which can redirect goods to their own home market. Canberra is likely to be eager to change that and forge a closer relationship with Australia’s business sector to encourage maintaining domestic ownership. As world limits exports, can New Zealand and Singapore keep trade open? Europe and America, laden with new debt, I suspect, may at first attempt to go back to the old ways of relying on supply chains on the other side of the world. That is likely to result in another bloody nose in the next crisis, but they will learn in time. The full social and economic impact in the West is still unknown, and the infection numbers are continuing to rise in places. If common sense can prevail over economics, the recovery is likely to be a long one for Europe and the US. Bringing back production and recreating local supply chains along the lines of those that existed 30 to 40 years ago will be difficult and costly. Britain may have a head start, having already woken up to the fact that being in the European Union and acting like everyone else didn’t work. ■ Neil Newman is a thematic portfolio strategist focused on pan-Asian equity markets. Help us understand what you are interested in so that we can improve SCMP and provide a better experience for you. We would like to invite you to take this five-minute survey on how you engage with SCMP and the news.