How China May Foreshadow the Economic Impact of COVID-19
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COVID-19 Crash: How China’s Economy May Offer a Glimpse of the Future

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COVID-19 economic impact

The Economic Impact of COVID-19

China, once the epicenter of the COVID-19 pandemic, appears to be turning a corner. As the number of reported local transmission cases hovers near zero, daily life is slowly returning to normal. However, economic data from the first two months of the year shows the damage done to the country’s finances.

Today’s visualization outlines the sharp losses China’s economy has experienced, and how this may foreshadow what’s to come for countries currently in the early stages of the outbreak.

A Historic Slump

The results are in: China’s business activity slowed considerably as COVID-19 spread.

Economic IndicatorYear-over-year Change (Jan-Feb 2020)
Investment in Fixed Assets*-24.5%
Retail Sales-20.5%
Value of Exports-15.9%
Industrial Production-13.5%
Services Production-13.0%

*Excluding rural household investment

As factories and shops reopen, China seems to be over the initial supply side shock caused by the lockdown. However, the country now faces a double-headed demand shock:

  • Domestic demand is slow to gain traction due to psychological scars, bankruptcies, and job losses. In a survey conducted by a Beijing financial firm, almost 65% of respondents plan to “restrain” their spending habits after the virus.
  • Overseas demand is suffering as more countries face outbreaks. Many stores are closing up shop and/or cancelling orders, leading to an oversupply of goods.

With a fast recovery seeming highly unlikely, many economists expect China’s GDP to shrink in the first quarter of 2020—the country’s first decline since 1976.

Danger on the Horizon

Are other countries destined to follow the same path? Based on preliminary economic data, it would appear so.

The U.S.
About half the U.S. population is on stay-at-home orders, severely restricting economic activity and forcing widespread layoffs. In the week ending March 21, total unemployment insurance claims rose to almost 3.3 million—their highest level in recorded history. For context, weekly claims reached a high of 665,000 during the global financial crisis.

“…The economy has just fallen over the cliff and is turning down into a recession.”

Chris Rupkey, Chief Economist at MUFG in New York

In addition, manufacturing activity in eastern Pennsylvania, southern New Jersey, and Delaware dropped to its lowest level since July 2012.

Globally
Other countries are also feeling the economic impact of COVID-19. For example, global online bookings for seated diners have declined by 100% year-over-year. In Canada, nearly one million people have applied for unemployment benefits.

Hard-hit countries such as Italy and Spain, which already suffer from high unemployment, are also expecting to see economic blows. However, it’s too soon to gauge the extent of the damage.

Light at the End of the Tunnel

Given the near-shutdown of many economies, the IMF is forecasting a global recession in 2020. Separately, the UN estimates COVID-19 could cause up to a $2 trillion shortfall in global income.

On the bright side, some analysts are forecasting a recovery as early as the third quarter of 2020. A variety of factors, such as government stimulus, consumer confidence, and the number of COVID-19 cases, will play into this timeline.

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This Simple Chart Reveals the Distribution Of Global Wealth

Global wealth at the end of 2020 was about $418 trillion. Here’s a breakdown of the global wealth distribution among the adult population.

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The Global Wealth Distribution in One Chart

The pandemic resulted in global wealth taking a significant dip in the first part of 2020. By the end of March, global household wealth had already declined by around 4.4%.

Interestingly, after much monetary and fiscal stimulus from governments around the world, global household wealth was more than able to recover, finishing up the year at $418.3 trillion, a 7.4% gain from the previous year.

Using data from Credit Suisse, this graphic looks at how global wealth is distributed among the adult population.

How is Global Wealth Distributed?

While individuals worth more than $1 million constitute just 1.1% of the world’s population, they hold 45.8% of global wealth.

Wealth RangeWealthGlobal Share (%)Adult Population
Over $1M$191.6 trillion45.8%Held by 1.1%
$100k-$1M$163.9 trillion39.1%Held by 11.1%
$10k-$100k$57.3 trillion13.7%Held by 32.8%
Less than $10k$5.5 trillion1.3%Held by 55.0%
Total$418.3 trillion100.0%Held by 100.0%

On the other end of the spectrum, 55% of the population owns only 1.3% of global wealth.

And between these two extreme wealth distribution cases, the rest of the world’s population has a combined 52.8% of the wealth.

Global Wealth Distribution by Region

While wealth inequality is especially evident within the wealth ranges mentioned above, these differences can also be seen on a more regional basis between countries.

In 2020, total wealth rose by $12.4 trillion in North America and $9.2 trillion in Europe. These two regions accounted for the bulk of the wealth gains, with China adding another $4.2 trillion and the Asia-Pacific region (excluding China and India) another $4.7 trillion.

Here is a breakdown of global wealth distribution by region:

RegionTotal Wealth
(US$B)
Change in Total Wealth
(US$B)
Change %Wealth Per Adult
(US$B)
Change %
North America136,31612,37010.0486,9309.1
Europe103,2139,1799.8174,8369.8
Asia-Pacific75,2774,6946.760,7905.0
China74,8844,2466.067,7715.4
India12,833-594-4.414,252-6.1
Latin America10,872-1,215-10.124,301-11.4
Africa4,946360.77,371-2.1
World418,34228,7167.479,9526.0

India and Latin America both recorded losses in 2020.

Total wealth fell in India by $594 billion, or 4.4%. Meanwhile, Latin America appears to have been the worst-performing region, with total wealth dropping by 11.4% or $1.2 trillion.

Post-COVID Global Outlook 2020-2025

Despite the burden of COVID-19 on the global economy, the world can expect robust GDP growth in the coming years, especially in 2021. The latest estimates by the International Monetary Fund in April 2021 suggest that global GDP in 2021 will total $100.1 trillion in nominal terms, up by 4.1% compared to last year.

The link in normal times between GDP growth and household wealth growth, combined with the expected rapid return of economic activity to its pre-pandemic levels, suggests that global wealth could grow again at a fast pace. According to Credit Suisse estimates, global wealth may rise by 39% over the next five years.

Low and middle-income countries will also play an essential role in the coming year. They are responsible for 42% of the growth, even though they account for just 33% of current wealth.

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Mapping The Biggest Companies By Market Cap in 60 Countries

Tech, finance or energy giant? We mapped the biggest companies by market cap and industry.

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Mapping The Biggest Companies By Market Cap in 60 Countries Share

The Biggest Companies By Market Cap in 60 Countries

Tech giants are increasingly making up more of the Fortune 500, but the world’s biggest companies by market cap aren’t so cut and dry.

Despite accounting for the largest market caps worldwide—with trillion-dollar companies like Apple and contenders including Tencent and Samsung—tech wealth is largely concentrated in just a handful of countries.

So what are the biggest companies in each country? We mapped the largest company by market cap across 60 countries in August 2021 using market data from CompaniesMarketCap, TradingView, and MarketScreener.

What are the Largest Companies in the World?

The world has 60+ stock exchanges, and each one has a top company. We looked at the largest local company, since many of the world’s largest firms trade on multiple exchanges, and converted market cap to USD.

CountryCompanyIndustryMarket Cap (August 2021)
USAAppleTechnology$2.5T
Saudi ArabiaSaudi AramcoEnergy$1.9T
TaiwanTSMCTechnology$594.5B
ChinaTencentTechnology$554.0B
South KoreaSamsungTechnology$429.7B
FranceLVMHConsumer Cyclical$414.3B
SwitzerlandRocheHealthcare$350.0B
NetherlandsASMLTechnology$322.6B
JapanToyotaConsumer Cyclical$251.6B
DenmarkNovo NordiskHealthcare$236.7B
IrelandAccentureTechnology$208.2B
IndiaReliance IndustriesEnergy$198.1B
AustraliaBHP GroupMaterials$191.7B
CanadaShopifyTechnology$185.7B
UKAstrazenecaHealthcare$182.0B
GermanySAPTechnology$174.6B
SingaporeSEATechnology$152.3B
Hong KongAIAFinancials$146.4B
BelgiumAnheuser-Busch InbevConsumer Staples$122.7B
SpainInditexConsumer Cyclical$108.3B
BrazilVALEMaterials$103.9B
RussiaSberbankFinancials$96.7B
ItalyEnelUtilities$93.7B
ArgentinaMercadoLibreConsumer Cyclical$89.5B
SwedenAtlas CopcoIndustrials$84.1B
South AfricaNaspersTechnology$74.1B
NorwayEquinorEnergy$67.9B
UAEEtisalatCommunication$58.7B
MexicoWalmexConsumer Staples$58.1B
IndonesiaBank Cental AsiaFinancials$54.8B
KazakhstanKaspi.kzFinancials$49.8B
QatarQNBFinancials$48.2B
FinlandNordea BankFinancials$48.0B
LuxembourgArcelorMittalMaterials$36.3B
AustriaVerbundUtilities$33.7B
ThailandPTT PCLEnergy$30.1B
ColombiaEcopetrolEnergy$26.7B
MalaysiaMaybankFinancials$23.7B
PhilippinesSM InvestmentsConsumer Cyclical$22.9B
KuwaitKuwait Finance HouseFinancials$21.9B
PortugalEDP GroupUtilities$21.0B
VietnamVinhomesReal Estate$17.1B
IsraelNICETechnology$16.9B
KenyaSafaricomCommunication$16.0B
Czech RepublicÄŒEZ GroupEnergy$15.8B
New ZealandXeroTechnology$15.8B
TurkeyQNB FinansbankFinancials$15.8B
HungaryOTP BankFinancials$15.6B
ChileEnel AmericasUtilities$14.3B
MoroccoMaroc TelecomCommunication$13.6B
PolandPKO Bank PolskiFinancials$12.6B
CyprusPolymetalMaterials$10.0B
NigeriaDangote GroupMaterials$10.0B
BahrainAhli United BankFinancials$8.6B
GreeceOTE GroupCommunication$8.4B
PeruCredicorpFinancials$8.0B
EgyptCommercial International BankFinancials$5.9B
IcelandMarelIndustrials$5.8B
OmanBank MuscatFinancials$4.2B
PanamaCopa HoldingsIndustrials$3.1B

Many are former monopolies or massive conglomerates that have grown in the public space, such as South Africa’s Naspers and India’s Reliance Industries.

Others are local subsidiaries of foreign corporations, including Mexico’s Walmex, Chile’s Enel and Turkey’s QNB Finansbank.

But even more noticeable is the economic discrepancy. Apple and Saudi Aramco are worth trillions of dollars, while the smallest companies we tracked—including Panama’s Copa Group and Oman’s Bank Muscat—are worth less than $5 billion.

Finance and Tech Dominate The Biggest Companies By Market Cap

Across the board, the largest companies were able to accumulate wealth and value.

Some are newer to the top thanks to recent success. Canada’s Shopify has become one of the world’s largest e-commerce providers, and the UK’s AstraZeneca developed one of the world’s COVID-19 vaccines.

But the reality is most companies here are old guards that grew on existing resources, or in the case of banks, accumulated wealth.

IndustryBiggest Companies by Country
Financials16
Technology12
Energy6
Materials5
Communication4
Consumer Cyclical4
Utilities4
Healthcare3
Industrials3
Consumer Staples2
Real Estate1

Banks were the most commonly found at the top of each country’s stock market. Closely behind were oil and gas giants, mining companies, and former state-owned corporations that drove most of a country’s wealth generation.

But as more economies develop and catch up to Western economies (where tech is dominant), newer innovative companies will likely put up a fight for each country’s top company crown.

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