China sneezed, and the rest of the world caught a cold.
Economically speaking, this market contagion used to be the exclusive role of the good ol' US of A. Should its markets fall, the rest of the world's stock markets would topple in the following months.
But China – as predicted by economists and futurists back in the late 1980s – has emerged as the rival to the US in terms of its fiscal power: its spending seems unlimited, whether collectively or individually among its uber-wealthy.
Not for nothing did Washington issue a 42-page paper last year, titled: China’s Economic Rise: History, Trends, Challenges, and Implications for the United States.
Its influence has extended beyond Asia to Africa and the Western world, buying businesses based in the UK, Europe and the US. It is engaged in a tariff stand-off against President Donald Trump and, as Number 45 once said, trade wars are "easy to win".
Yes they are – if they are backed by the Chinese yuan.
Those who saw China implement reforms back in 1979 may not have predicted this sleeping giant would actively overtake the rest of us in terms of GDP, but according to the International Monetary Fund's 2020 rankings based on GDP, this 1.4bn-person country has a GDP of $14.22tn (£11tn), second only to the US, at $21.34 tn (£17tn).
True, this is spread very thinly per capita, like too little butter over too much bread (to steal a line from Tolkien), with the average US GDP per capita at $56,267 (£54,000) compared with $7,794 (£6,000) for China.
But the wealth concentrated among the uber-wealthy has propped up businesses around the world – until now.
The coronavirus pandemic, which was first discovered in Wuhan, China, has brought irreparable economic damage to many businesses, never mind the stock markets.
British company Flybe, owned by Connect Airways, has been grounded, with the pledged £100m government loan stalling as a result of the coronavirus scare.
Too late for Flybe, but perhaps some relief to other airlines, has been the concurrent oil 'spat' between Russia and Saudi Arabia, which has pushed the price of crude oil down and added to the stock market panic of the past week.
Markets do scramble back upwards, eventually, even though we have seen losses on major stock markets, the likes of which have not happened in 30 years in some cases. For those with time to stay invested, now is a good opportunity to buy more, and sit tight.
But individual business owners and their staff are less resilient. And with the potential impact on human life still unquantified – 3.4 per cent mortality is the figure cited by the WHO – we still have a long way to go.
Simoney Kyriakou is editor of Financial Adviser
