08 Jul 2020

The Race to Reopen

The Race to Reopen

Since the pandemic, economies worldwide have experienced an unprecedented wave of economic tsunami, with lockdowns and border closures causing business activities to plunge to abysmally low levels that might even eclipse the Great Depression of 1930s. With some countries experiencing some signs of success in getting the COVID-19 under control, they are in a better position than others in reopening their borders and restarting normal business activities, although the level of business activities is unlikely to return to the good old pre-COVID-19 days. Whether you are seeking to travel to these places for business or work, or you have some form of business or investment interests in these economies, here are our top five predictions.


Despite facing a resurgence of COVID-19 in the northern provinces like Jilin, and particularly in its capital city of Beijing, the virus in the rest of China’s provinces seems to be under control. Although unemployment has risen due to the shedding of jobs caused by the pandemic, around 90% of the Chinese workforce is already back to work, with economic indicators such as car demand rising back to pre-crisis levels. Moreover, after undergoing a 6.8% contraction in the first quarter of 2020, due to its stringent shutdown measures for all its provinces, China’s economy posted a rebound in the April – June period in production and consumption.

Despite an on-going trade war, experts remain optimistic that the Chinese economy has the defensive armour in place to withstand the economic fallout. Even before the pandemic, China has already started structural changes to transition from being an export-driven economy to focus more on domestic consumption, development of high-value technology, and domestic services. With a massive 1.3 billion domestic consumption market, and a burgeoning tech sector led by the likes of Tencent and Alibaba, China’s economic engine is likely to power on, albeit at a slower speed in the years ahead.


Of all the EU economies, Germany seems to be the most promising. Although Germany’s economy is facing its most serious post-war recession, it has, nevertheless, emerged from the pandemic with lesser damage that its fellow European counterparts. This is largely due to Germany’s greater level of success in planning and implementing its COVID-19 measures where high levels of testing (in the European Union, Germany is a leader in tests per confirmed case), an effective containment strategy among the elderly, and efficient use of the country’s hospital capacity, saw it being lauded as one of the shining success stories in containing the outbreak among the western developed economies.

Although it hasn’t fully resumed normalcy yet, its DAX stock index has rebounded by more than 40% since its low in March, and manufacturing orders actually increased 10.4% in May in adjusted terms after a downwardly revised 26.2% decline in April, signalling that its manufacturing contraction is gradually being reversed. Official statistics also showed that retail sales rose by 13.9% on the month in real terms, after a downwardly revised drop of 6.5% in April, suggesting that the European manufacturing powerhouse’s economic rebound is gathering pace.


Vietnam remains one of the world’s most amazing success stories when it comes to containing the COVID-19 outbreak. Due to the government’s swift measures to shout down schools, restrict international travel, and close its borders very early on in the outbreak, the country now has one of the lowest infection and death rates in the world. This success means that that while the rest of the world were still undergoing their lockdowns, Vietnam has been able to restart its normal business activities as early as April.

Following the outbreak of the COVID-19, the IMF’s 2020 GDP growth forecast for 5 of ASEAN’s countries – Indonesia, Malaysia, the Philippines, Singapore, and Thailand – was shaved to -1.3 per cent (and Singapore -4-7 per cent), but Vietnam is still on course to notch a projected 2.7 per cent GDP growth in 2020. Moreover, despite its month-long shutdown, Vietnamese retail and service revenues surged by 5.3 per cent in June over the same month last year – and by 6.2 per cent over May, garnering an astounding US103 billion. Additionally, although it will not be able to completely replace China in terms of export and manufacturing volumes, Vietnam will likely benefit from some companies that are shifting their supply chains to diversify risks in the post-COVID-19 world.


Despite botching its handling of the Diamond Princess crisis in Yokohama, Japan has largely managed to contain the spread of COVID-19, after instituting stringent social distancing and border control measures very early on in the outbreak. It also successfully adopted large-scale testing and aggressive contact tracing to prevent the spread of the virus.

Japan slipped into recession in the first quarter, and is expected to suffer an annualised contraction of more than 20% in April-June, as output and consumption plunged after the government ordered businesses to close and citizens to stay home. However, since the restrictions were lifted in May, businesses have gradually resumed, and shoppers are boosting retail activity by returning to the streets. The government’s massive stimulus package and central bank lending schemes have also helped to cushion the economic blow, paving the way for a modest recovery in the latter half of 2020.

Japan’s ailing economy won’t be out of the woods so fast, but unless a second wave derails its recovery, the Japanese are likely to be one of the fastest to rebound from the COVID-19 crisis. Also, hosting a grand-scale sporting event such as the Olympics next year, might help to resuscitate its travel and hospitality sectors.

New Zealand

New Zealand might not be a major economic power, and it is staring down at a massive 23% recession, but with Prime Minister Jacinda Ardern’s leadership, the country has emerged as the first nation in the world to be declared “COVID-free”. Now that the lockdown has ceased, both the government and the central bank are forecasting a rapid recovery, with annualised growth resuming as early as mid-2021.

Additionally, the Kiwis also have one of the lowest debt levels among developed economies, at only 19% of GDP, which allowed the government to unveil a massive rescue fund of NZ$50 billion to preserve jobs and businesses. Its stock market has also largely rebounded from the massive corrections which have rocked the world’s stock exchanges at the beginning of February.

It also helps that several American businesses have shown keen interest in relocating to the Kiwi “safe haven” to restart their lives and businesses.