Long, hard coronavirus recovery ahead for Asian companies, especially those outside the digital economy

Name: Global coronavirus cases surpass 25 million as India deals with world’s fastest-growing outbreak
Uploaded: 2020-09-23T01:15:11.000Z
Duration: 2 min 7 s
Description: Global coronavirus cases surpass 25 million as India deals with world’s fastest-growing outbreak

Many executives believe economies will not return to pre-pandemic levels in 2021, suggesting little faith in prospects for a V-shaped recovery

Workers and firms not in the digital space face an even harder road, complicated by Covid-19, Sino-US tensions and the growing impact of climate change

Reading Time:4 minutes

Why you can trust SCMP

A migrant labourer waits for work on the street in Beijing on August 17. The prospect of a protracted recession and a jobless recovery thereafter could make life especially tough for firms and workers not integrated into the digital world. Photo: EPA

Mark Clifford

Published: 9:15am, 23 Sep 2020Updated: 10:35am, 23 Sep 2020

The worst is over, or at least that’s what many Asia Business Council members think about economic prospects for the next year. They believe it will be another year or perhaps more, though, until economies return to pre-crisis levels. More jobs will be cut on the path to recovery. It will be a long, hard road back to economic growth, one which is going to be especially tough for many workers who aren’t in the digital world.

These are among the findings of the council’s latest annual members survey. The council comprises 70 CEOs and chairmen, mostly from Asia, who together run companies valued at about US$3 trillion and directly employ 3 million people. The survey was conducted from mid-August until mid-September and had a response rate of 83 per cent.

Half of those surveyed felt business conditions would improve in the next 12 months. That’s the highest number since 2009, when 67 per cent of those polled in the midst of the global financial crisis predicted conditions would improve in the following year. For now, we’re so far down that, for many business leaders, it might feel like the only way is up.

Still, opinion about a recovery is more divided than it was in 2009, with one-third of this year’s respondents predicting that conditions will worsen in the next 12 months. While lower than the corresponding figure of 55 per cent in 2019 and 47 per cent in 2018, this compares with just 6 per cent in 2009 and is among the highest degrees of pessimism since the survey began in 2006.

When will economies get back to pre-pandemic levels? It is going to be quite some time, if members’ forecasts are accurate. Just 19 per cent think economic activity will return to pre-pandemic levels by mid-2021. Another one-third think it will be by the end of 2021.

02:07

Global coronavirus cases surpass 25 million as India deals with world’s fastest-growing outbreak

By far the largest number – 41 per cent – think it will be 2022 or later. In short, most of these executives are writing off the idea of a V-shaped recovery and many seem to be writing off 2021.

Select Voice

Choose your listening speed

Get through articles 2x faster

1.25x

250 WPM

Slow

Average

Fast

00:0000:00

1.25x