China may have a rocky recovery from coronavirus, according to Nomura economist Richard Koo.
Key parts of the economy that supported recovery after SARS, such as a growing labor force and corporate investment, may be lacking today, he said.Much of Wall Street expects China's economy to bounce back from coronavirus with few long-term consequences, just as it did with SARS in 2003. That's misguided, according to Nomura analyst Richard Koo.
There are key differences between the Chinese economy now versus when SARS hit, Koo wrote in a Monday note. He said those hindrances will make recovering from coronavirus, the fast-spreading illness that has led Chinese cities to lock down and businesses to temporarily shut their doors, a bigger challenge.
Koo's note comes as economies and markets across the globe are scrambling to understand what coronavirus will mean for the Chinese economy. Many on Wall Street predict that the effects of the outbreak on the economy will be limited to the
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