Important Links

Addressing Concerns on the COVID-19

17 February 2020EquitiesEconomicsAsia Pac

Will China's economy be able to recover quickly like in 2003? Back in 2003, China's economic growth fell from 12% QoQ annualized in 1Q to 3.5% in 2Q during the depth of the SARS crisis, but snapped back to 16% in 3Q. Nearly 2 decades have passed since SARS outbreak, and in that time China has grown from the world’s sixth largest economy to the 2nd biggest today. China's economy accounted for roughly 4% of global GDP in 2003; it now makes up 16% of global output.

Some speculate that this time, China’s recovery will be slower and the virus effect lasting longer. However, Citi analysts believe that the impact this time is likely to be shallower and shorter, as the government response has been a lot quicker and stronger. No city was shut down like Wuhan during the SARS episode.

A key driver of quick recoveries is policy. The PBOC has already added 1.2 trillion yuan ($174 billion) worth of liquidity into the markets via reverse repo operations. The government has also announced a flurry of fiscal measures ranging from tax cuts to subsidies to local bond issuance to mitigate the worst hit areas.•

Addressing Concerns on the COVID-19

Past performance does not guarantee future results, real results may fluctuate.

While China’s 2020 GDP forecast has been revised down from 5.8% to 5.3%, Citi analysts continue to believe that the greater opportunity remains in the attractively valued China/HK markets. There is likely to be downward earnings revision risks, largely impacting the tourism, transportations and energy sectors.

Similar to the SARS episode in 2003, the hardest hit sectors are those related to tourism, hospitality and transportation due to massive travel restrictions and quarantines. Airlines, marine, hotels, restaurants & leisure and gambling slumped 9%-14% since Jan 20, when China first confirmed human-to-human transmission. Some industrial sectors also had notable corrections, as factories had extend holidays.

The most direct beneficiary is healthcare, especially those engaged in innovative technology and advanced sciences, such as healthcare technology, equipment & supplies, biotech and life sciences. Spending more time at home, most of the consumer activities have been shifted from offline to online. Online shopping, entertainment and cloud office software have outperformed.

Our recent research

What are Markets Pricing In?

COVID-19 appears as the first new shock to positive expectations for the world economy in 2020. Global financial market volatility is expected to increase in the immediate future and strategies acknowledging this are preferred.

Find out more

EquitiesEconomics

Market Update on Coronavirus

There remains a lot of uncertainty but containment efforts appear to be making progress, with several turning points observed in recent days. Citi’s Global Investment Committee remains overweight equities in a globally diversified portfolio.

Find out more

Asset AllocationEconomicsPoliticsEquities

Will China's economy be able to recover quickly?

Although China is now a larger economy and growing more slowly than during SARS, the economic drag resulting from the coronavirus is likely to be concentrated in Q1.

Find out more

Asia PacEmerging MarketsEconomicsPolitics

Take the first steps to your wealth management planning with Citi

Speak to a Relationship Manager
0207 500 1992

Already with Citi? Contact your relationship manager or view product availability on Citi Online

Why choose Citi

A relationship - not just a bank account

A dedicated Relationship Manager giving you access to our internal team of product experts and all our benefits

Access to exclusive Citi products

A range of current and investment products available both on shore and offshore, in the currency of your choice
Multi-currency accounts
Investment products

Global services for a global lifestyle

Our team is here to support you getting started in UK or with International travel and relocation
Moving to and from the UK
Travelling overseas

Offshore investments

We offer a diverse range of banking and investment services, including for those who want access to offshore investments

Find out more

Just moved to the UK?

We can save you time money and hassle. If you are a foreign national in the UK, Citi's International Banking Service can help you manage your money, home and away.

Find out more

Investment products are not insured by any governmental agencies, are not bank deposits, and are neither obligations of, nor guaranteed by, Citigroup, or any of its affiliates, unless otherwise stated. Investment products are subject to investment risks, including possible loss of some or all of the principal amount invested. Past performance is not indicative of future results, investments can go down as well as up.

“Citi analysts” refers to investment professionals within Citi Research (“CR”), Citi Global Markets Inc. (“CGMI”) and voting members of the Citi Global Investment Committee. Citibank N.A. and its affiliates / subsidiaries provide no independent research or analysis in the substance or preparation of this document. The information on this page has been obtained from reports issued by CGMI. Such information is based on sources CGMI believes to be reliable. CGMI, however, does not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute CGMI’s judgment as of the date of this page and are subject to change without notice. This page is for general information purposes only and is not intended as a recommendation or an offer or solicitation for the purchase or sale of any security or currency. No part of this page may be reproduced in any manner without the written consent of Citibank N.A. Information on this page has been prepared without taking account of the objectives, financial situation, or needs of any particular investor. Any person considering an investment should consider the appropriateness of the investment having regard to their objectives, financial situation, or needs, and should seek independent advice on the suitability or otherwise of a particular investment. Citi Research (CR) is a division of Citigroup Global Markets Inc. (the "Firm"), which does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this information. Investors should consider this information as only a single factor in making their investment decision.

Opinions expressed herein may differ from the opinions expressed by other businesses or affiliates of Citigroup, Inc., and are not intended to be a forecast of future events, a guarantee of future results or investment advice, and are subject to change based on market and other conditions.