(Mar 13): Cash liquidity not Covid-19 is now the immediate issue for China. With the rate of domestic infections reportedly at zero, the attention now returns to the shape of a stimulus package to bring a battered economy back up to speed.

At the same time, Western markets are going into meltdown and lockdown in reaction to Covid-19 in their own environments. The impact is likely to be far greater than the impact in China. In the United States, access to healthcare is expensive. It is beyond the means of the poor and much of the lower middle class. The most common cause of bankruptcies is medical bills.

Put bluntly, people in these groups cannot afford Covid-19 testing or treatment and so this becomes a reservoir of infection and contagion. The economic impacts will be substantial and payroll tax relief is a drop in the ocean. This is relevant because it suggests that, as China recovers, the international demand for Chinese exports will not be at pre-Covid-19 levels.

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