"Economy Depends on 2nd Wave of COVID-19... Focus on Movements in Korea and China During Golden Holiday"

[Image source=Yonhap News]

[Asia Economy Reporter Kim Eun-byeol] Although the novel coronavirus infection (COVID-19) appears to be subsiding domestically, there are growing concerns that the speed of economic recovery worldwide, including in Korea, could vary depending on whether a second wave occurs. If COVID-19 is eradicated, a V-shaped rebound driven by retaliatory consumption could be expected; however, if social distancing measures are relaxed and lead to a second wave, it could result in a prolonged economic downturn. In particular, it is pointed out that caution is needed as the number of travelers is expected to increase significantly during the May holidays, especially in Korea and some Asian countries such as China.

On the 30th, the International Financial Center stated in its report titled "Assessment of the Possibility of COVID-19 Resurgence in China" that "Given the easing of lockdown measures in China, it is difficult to rule out the possibility of a second wave due to asymptomatic infections, re-activated cases, increased imported infections, and cluster infections caused by holidays and school openings."

In China, confirmed COVID-19 cases surged again in some regions such as Heilongjiang Province earlier this month but have stabilized so far. However, citing a Chinese virologist, the report noted, "There may currently be 200,000 asymptomatic patients in China, and one asymptomatic individual could potentially infect up to 3.5 people."

Especially, the upcoming Golden Week holiday from May 1 to 5 is a key point as suppressed travel and outdoor activities are likely to surge. After the Chinese government officially announced the Labor Day holiday schedule, searches for travel products on online travel agency websites increased by more than 300%. Starting from the end of April with high school seniors, elementary school grades 4, 5, and 6, as well as all middle schools, are scheduled to reopen in May, maintaining concerns about cluster infections.

[Image source=EPA Yonhap News]

In Korea as well, during the six-day Golden Week holiday from Buddha’s Birthday (April 30) to Children’s Day (May 5), outings and travel are expected to surge. According to a survey by the Korea Transport Institute, 3 to 4 out of 10 citizens plan to travel or go on outings during the holiday.

Health authorities have requested the public to refrain from unnecessary gatherings and outings during this period to prevent the spread of COVID-19, while repeatedly emphasizing that if people do travel, they must adhere to quarantine guidelines at their destinations.

Although the surge in holiday travelers will have a positive impact on domestic demand, if COVID-19 cluster infections start spreading again, not only Korea but also China and the rest of the world may have no choice but to enter lockdowns (movement restrictions) once more. Dr. Anthony Fauci, director of the U.S. National Institute of Allergy and Infectious Diseases, recently stated at an economic event in Washington, D.C., "How we handle the second wave in the second half of the year will determine our fate."

Economic experts also view the possibility of a second wave in the U.S. as high. According to a CNBC survey, economic experts forecast the likelihood of a 'second wave' this fall and winter to be over 60%.

The Economic Times raised concerns that "if vaccine and treatment development is delayed, the world, including China, could face a second outbreak in November this year," and Nomura Securities pointed out that "considering the low reliability of data from some local governments in China, this could further heighten the risk of a second wave."

The International Financial Center emphasized, "Due to the nature of COVID-19, it is difficult to completely eradicate the virus without the development of vaccines and treatments, and it should be noted that even in some exemplary countries like Singapore, the virus is spreading again as social distancing and self-quarantine measures weaken."

This content was produced with the assistance of AI translation services.