Asian economies may ride out the coronavirus crisis better than the West, analysts say

Investors hunting for safe spots to park their money should look to Asia now amid the current pandemic, analysts said, highlighting that the region is much more prepared economically to ride out the current crisis compared to the West. “It does make sense to tilt your portfolio towards China or towards Asia generally because the virus is moving from that region ... to the West where it is unfortunately not yet contained,” said Andrew Harmstone, a senior portfolio manager at Morgan Stanley.  

However, he pointed out that the West is still China’s biggest customer, so a global recovery will be needed for China to make a full comeback. He said the economic impact of the pandemic has hit businesses in the U.S., and many small businesses which employ about 60% of the country’s workforce  have only a month’s worth of cash flow. Severe outbreaks are not new to countries in Asia. The latest coronavirus outbreak has often been likened to the SARS epidemic in 2003, which hit mainland China, Hong Kong, and Singapore particularly hard, and plunged their respective economies into recession.That led governments to position themselves strongly for the next disaster. 

 Global interest rates are already low, with some countries already in negative territory. But central banks in Asia generally have more ammunition to cut borrowing costs to support their economies, compared to their U.S. and European peers, analysts suggested.

That implies that Asian central banks have more room to use monetary policy to boost their economies.  

“Investors should not forget that real interest rates remain positive and nominal rates even higher among many Asian and emerging markets – in stark contrast to developed markets,” said Aberdeen’s Leong. I agree with this article as Asian countries seem to be in the further through in the pandemic, they will be better off than the Western countries which are yet to face the extremes of the pandemic. 

https://www.cnbc.com/2020/03/25/coronavirus-asia-may-ride-out-crisis-better-than-us-europe-analysts-say.html