Global Economy in Coronavirus Pandemic: A Review

Ramkumar offers a review of the global economic condition in amidst the global coronavirus pandemic that has had significant damage to global trade. The article focuses on trade elements that provide an accurate measure of the global financial trading, gold, treasuries, and major indexes. It compares them against the stock-market resilience with a background of slowed international trading. The article provides reliable figures to demonstrate the extent of recovery of the macroeconomy. The challenges follow an unprecedented dip caused by the coronavirus scare. The S&P 500, for instance, registered a 25% rebound within a few weeks after experiencing a significant dip. On its part, gold had risen to a seven-and-a-half-year high, registering a 15% rise for the year. Further, there had been billions of dollars converted into gold exchange-traded funds in the wake of soaring sales of gold coins and physical bars. With these statistics, the author effectively validates his position regarding the economy.

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Besides gold and stock prices, the article also noted an increase in treasuries. By March 18, there had been a 10-year U.S. record rise, with the treasury note dropping from 1.26% to 0.61%. This trend is a significant indicator of economic health, just a few days earlier, investors had been pushed into selling a range of safe and risky assets to raise cash. Major currencies like the Japanese Yen and the Swiss Franc had also recorded significant gains. The article provides a broader analysis in its attempt to convey the message of hope of a possible economic resurgence as the world explores strategies to pull through the coronavirus pandemic. It also notes the impact of strategies taken to help protect the economy from decline. The decision to slash Federal Reserve interest rates to almost zero is credited with the upward trend in asset purchase and lending, which ensured sustained positive activity in the market.

The author contributes to positive reporting, which is essential for sustained stock market activity. The article notes the optimism among financial analysts who relate the simultaneous rebounds in the various trade items to a quick economic recovery. He notes that, whereas the shock experienced was akin to a recession, the economy has registered a significant rebound in corporate profits. Despite this positive performance, the article also notes that full activity might require time to regain. The author highlights the view that there is a disconnect between how financial analysts expect the economy to perform, and the reality of the stock market performance. From the graph provided, the performance of key financial indicators took at least two months to show a significant increase. However, the uncertainty regarding when the pandemic ends continues to hold the performance of the economy.

In the article, the author alludes to the fact that, despite the successful rebound, the economy was not strong enough yet to allow the world to overcome the impact of the economic dip. Positive trends in one element do not provide a complete perspective on the economic environment. The article provides that the monthly sale of gold coins in America has seen a four-year high; it means that the dollar could weaken. However, since the government has significant bonds, it is likely to miss out on the profitability of the gold. Hence, when the world gets back to normal, the economy may not be properly balanced to achieve its key objectives.

Article 2: China Offers Early Test of Bonds Backed by Consumer Loans

In this article, Yu highlights a pertinent aspect of the global economy in the context of the coronavirus pandemic. The Chinese economy has been one of the fast-rising ones and presently stands atop the global economic rankings. A review of the country's internal economic performance, and how the economic slow down reflects on the country's financial position is significantly essential. The article notes that China's market for bonds that are supported by car loans and mortgages faces the first major test. It begins by painting a grim image of the situation, noting that the number of past-due loans related to such bonds had hit record highs as reported by global credit rating firms. The uncertain credit environment shows the magnitude of the coronavirus pandemic on the economy of a leading market. Further, the article uses the Chinese scenario to project on the potential behavior of markets in which consumers borrow more against their assets or income. While the Chinese scenario may not be favourable from the outside, the article notes that its consumers have more savings that give them a safety net.

There are critical lessons from the Chinese situation that the article considers relevant learning points for other economies. It notes that a lockdown has a significant effect on how the structured-finance products perform. Hence, other countries need to take lessons and potentially establish strategies when they institute lockdowns. There is also the mention of the possibility that the delinquencies might increase further, leading into further defaults. Already, the situation was way above the country's five-year high. In the event that more borrowers default on their loans, bondholders would register significant losses.

The article also addresses the plight of export-dependent companies, which it notes are likely to struggle to recover. If such a scenario occurs, it would have ripple effects. There could be increased unemployment rates, which presently stands at an all-time high. Reduced activity during the pandemic has forced the economy to shrink. In light of these challenges, companies are already seeking approaches to help them work with consumers to defer their loan repayments. There are also options to restructure contracts so that the payments become less burdening to the consumer. The author reminds the audience of how strong the Chinese economy had been stable before the onset of the Coronavirus. The point the article seeks to impart on the audience is that, if the Chinese economy is capable of experiencing a dip, then the other economies are not safe. Hence, there needs to be proper mechanisms to safeguard the gains made so far.

The article notes that, whereas Chinese borrowers are often financially strong as depicted by their good saving culture, this would not be the case in the other economies. Chinese borrowers are likely to get financial support from their family members. Therefore, the situation in China's loan environment, though significantly affected, it manageable. Further, other analysis noted that the situation was not as bad because regulatory frameworks required that borrowers deposit at least 20 percent down payments on their car loans. This regulation alone helps to mitigate the risk of losses. In general, the article notes that, whereas the Chinese loan and borrowing environment has been significantly affected by the coronavirus pandemic, its internal framework was sufficient to help normalize the situation.

Article 3: China Chases Foreign Capital to Fend Off Coronavirus Slowdown

In this article, Kubotahighlights the importance of a collective approach to ensure a stable macroeconomic environment even as the world grapples with the coronavirus pandemic. The article begins by noting that, as China began to experience the impact of the pandemic, it recognized the importance of maintaining its links with the outside world. Therefore, as the country entered a lockdown, it engaged multinationals on how best to improve their operations and sustain a robust operational environment. The country's principal concern was whether key players in the economy were scared of the internal dynamics and whether they were reconsidering their stay in the country. Through government support, multinational companies began to restore their production and a friendlier environment was set up that allowed easy communication between the various stakeholders. Foreign direct investment is a significant proportion of China's investments.

The article notes how China had made appropriate steps to distinguish between its political exchanges with America over the origin of the virus, and maintaining a running economy. China's response to the pandemic was to provide a blanket treatment for all the companies resident in the country so that it sustained its engines of growth. However, the author notes that, as the pandemic began to hit other parts of the world in February, China's foreign direct investments began to decline. A United Nations communication that many companies were considering cutting their foreign direct investments is interpreted by China as likely to have a significant impact on the economy. China has been keen to protect the economy from suffering a major blow, and such a decision raises serious alarms among the country's policymakers.

The article quotes the Chinese Premier as underscoring the importance of implementing targeted policies to help prevent the potential decline in foreign trade. A decision by a majority of the foreign brands to suspend their expansions in China is a negative sign for global trade, as it is not guided by predictable risks. Concerns about China's transparency regarding the pandemic has done some businesses to consider withdrawing their presence in China. However, the situation also raises concerns about the role of internationalization and the security of home economies. The Japanese government was noted as pointing out that its fragility at a time when basic things such as face masks were required were enough indicators that some of the production was needed back home.

However, China recognizes what such a move portends for its internal employment and economic health, and has been on the charm offensive to convince all foreign business to maintain their stay in the country. As such, the country was working hard to show leadership in the fight against the pandemic. It was working to allow production to resume in earnest. Apart from establishing policies and recovery frameworks, the country implores the global community to help support the status quo.

Article 4: Emerging and Growth Markets

Dan Keeler addresses a critical issue at the time of the global Coronavirus pandemic. The Coronavirus pandemic has significantly slowed down the macro and microeconomics of almost all countries globally. However, most hit are probably low-income economies that are tied up in debt and might be forced to start from a negative pedestal once the COVID-19 issue is calmed. The majority of these countries, especially those in the global south rely heavily on the financial decisions made by international organizations and their global lenders. Thus, in addressing the issue of debt payments to other governments, the article addresses the core of the dilemma that faces most low-income countries during these trying times. The key message from the article is the relationship between the capacity of these countries to fight the pandemic internally, and their potential to maintain functional economies. Hence, the G20 approach is laudable and worth highlighting.

The article is comprehensive in the sense that it not only addresses the potential harm of coronavirus lockdowns to the economies of these countries but also explores the strategies that donor countries and global financial bodies are exploring to maintain normalcy. The article is apt in noting that low-income countries require more than internal interventions to strike a balance between keeping their attention on fighting the pandemic and worrying about their financial burdens. The author rightly notes that, whereas the world's wealthiest economies have space to borrow, these countries have huge debts that do not allow them any room to make...