China economic recovery ‘will lift surrounding economies’

Fast and effective containment of the Covid-19 outbreak is giving Asian countries an advantage over other economies, paving the way for a faster recovery, analysts at Goldman Sachs believe.

“We think Asia’s really the best positioned of the major regions right now, given the good control of the virus in most of the region outside of India and some parts of Southeast Asia,” Andrew Tilton, chief Asia economist at the investment bank, said as reported by CNBC on Monday.

Europe is currently facing a new wave of coronavirus infections, with more and more cities enforcing tougher restrictions, which may hamper their recovery from previous lockdowns.

The US is also seeing an increase in average daily cases and continuing confusion over how best to deal with the pandemic.

Meanwhile official data from China, one of the main economic drivers of the Asia region, shows the worst impact of coronavirus appears to be over. The country has been reporting only around 20 new cases per day for the past few weeks, compared to the thousands of daily infections still being reported in the US.

“I think, given the good control of domestic transmission of the virus in China, we are going to be seeing services activity come back there as well,” said Tilton.

According to global market strategist for Asia Pacific at Invesco David Chao, China has shown a continuing rebound from the pandemic, and this will give a boost to its neighbours. “China’s recovery will lift the surrounding Asian economies,” he told CNBC earlier this week.