Once the scenarios regarding the outbreak of the Coronavirus – or COVID-19 as it has been officially named – were confirmed, many tried to forecast what this could mean for the financial markets and the global economy.
Although the biggest concern of all citizens and governments of every country is clearly to stop the virus from spreading and preserve public health, on the sidelines of this major uncertainty looms the financial impact of this recent phenomenon.
Every day, the progress of the situation is forcing governments globally to impose special measures to limit the spread of the virus and protect the healthy citizens in their countries. These measures include strict controls at the entry/exit points of each country and isolation of any cases, while countries have even reached the point of placing under quarantine entire mainland areas.
So one can conclude that it is one thing to talk about placing a specific area or country under quarantine and an entirely different thing in terms of size and consequences to talk about a global-scale quarantine. This immediately places the global economy under a so-called quarantine.
This is a multi-layered problem, as the economies of the various countries are like links in a chain. When one link breaks, the shock wave does not just affect the link that broke, but the entire chain, as it stops being functional. This is precisely what is happening in China at the moment.
Without a doubt in its obvious down spiral, the economy of China, the country that is ground zero for the coronavirus outbreak, is dragging along the economies of other countries linked to it through commercial, business and investment transactions. Also bear in mind that China is the heart of global manufacturing, as well as the main supplier of goods to the entire planet, and mainly the Western world.
Apart from everything else, the latest developments are also slowing down the free movement of Chinese citizens, either due to possible measures that have been taken, or due to personal choice of the people to protect themselves from the virus, as well as from possible unexpected reactions both at the control points and in their transactions.
This wave could not but also affect the provision of services and especially the investment migration industry, as China constitutes the biggest supplier of investors who wish to have free access to the countries of Europe and seek alternatives to the restrictions in their country.
Initially, given that the COVID-19 outbreak is disrupting the economic activity of China – partially due to the evident isolation of large subsets of the population – there is reason to expect a sharp drop in the progress of investment migration programmes during the current year. The current situation has already postponed the plans of many Chinese investors, as tourist visas are not being issued to travellers.
On the other hand, the recent developments with the coronavirus and the relevant measures imposed by the Chinese government have demonstrated yet again the reasons why Chinese citizens wish to find a way out towards Europe, seeking the democratic values, stances and practices embedded in the Western culture.
Therefore, it is estimated that in the long run, when the alarm and the restrictions due to the current situation ease up, the desire to depart will take on gigantic proportions and there will be much greater demand for golden visa programmes, mainly from Chinese citizens.
The already rising trend recorded in European RBI and CBI programmes, which was stunted by the violent outbreak of the virus, will continue at a much more frantic pace and may even exceed any possible forecast.
It is almost certain that the period of recession we are currently experiencing will be overcompensated in the future with new and more determined investors, not just from China, but from all over the globe, who are realising that closed borders are being used all the more lately by countries as a method of suppression for various reasons.
In conclusion, and despite the general feeling of concern prevalent at the moment, the current situation should not affect the countries that offer relevant programmes; on the one hand, these countries should not be afraid and, on the other, they should prepare to receive the new wave of investment migration that will follow the day after the coronavirus, showcasing the European values of democracy, and the liberty, equality, fraternity legacy.