SINGAPORE (May 25): Across the world, investors and non-investors alike are focused on when and how economies will “reopen” after Covid-19 related shutdowns. But, just as important, if not more so, is the question: when will economies “reactivate”? In other words, when and how do consumers feel safe enough to resume normal spending behaviours? When will businesses feel they have created a safe-enough environment to bring back workers and resume pre-crisis levels of production?

It is well understood that a widely available vaccine is still several quarters away. It is also broadly agreed that a reduction in safe distancing policies risks second waves of infections and renewed shutdowns. Therefore, in addition to the tendency for consumers and businesses to be cautious in the aftermath of a recession, we have to monitor behavioural changes based on lingering fears of further virus spread. 

In attempting to examine post-virus behavioural changes, we think it most useful to look at China as a leading indicator for Europe and the US. China is a useful barometer given it is a country that experienced a severe bout of the virus but is now roughly two months into its reopening. 

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