Experts voice optimism for economic recovery

Paul Krugman, a winner of the Nobel prize in economics and author of the recently published Against the Zombies: Economics, Politics and the Fight for a Better Future, believes the virus has the potential to trigger a recession.

"Sooner or later, something will go wrong. The coronavirus could be that event, but if it isn't, something else will come along," he said.

"The big problem is lack of ammunition. Central banks don't have enough room to cut, and fiscal policy is paralyzed by ideology in much of the advanced world. So we're very vulnerable."

Roach, formerly Asia chairman of Morgan Stanley in Hong Kong as well as the investment bank's chief economist, also has concerns.

"The outbreak has come at a particularly vulnerable point in the global business cycle," he said.

Ulrich, from JP Morgan, said the epidemic has unnerved global stock markets, which remain volatile, but she believes the global economy can avoid a downturn.

"The virus has shocked the system, but hopefully growth will have a full recovery, with little to no lasting effects," she said.

"Global markets have taken notice of the seriousness of the virus, with volatility likely to remain high for the duration of the epidemic. Once it becomes clear that the contagion is under control, both in and outside China, investor confidence should return."

Some observers believe that while the outbreak is a short-term setback, it could be a major business opportunity for China, as there is likely to be major investment in drug and vaccine research to combat infections, with the potential for the country to lead the world in this field.

Emphasis is also likely to be placed on biosecurity to identify potential infections and track people's movements.

Edward Tse, CEO and founder of Gao Feng Advisory, a management consultancy, believes this could be one of the major outcomes of the crisis.

"I expect a big shift of emphasis toward so-called big health, pharmaceuticals and health services. There will be more focus on early detection and early prevention as well as diagnostics and treatment," he said.

Tse also believes that public health management will now be a key part of China's second generation of smart cities.

"Previously, the safety and security focus of these cities addressed traffic management and monitoring people's movements. There will be more interest in technology aimed at public health management and biosecurity," he said.

Andy Wynn, managing director of TTIP Consulting in the UK, which specializes in innovation, and author of The Biggest City You've Never Heard Of, a book about his experiences in China, said the crisis has brought home the critical importance of the biomedical, pharmaceutical and healthcare industries in containing future pandemics.

"There is no doubt that this situation is bringing emergency funding into the healthcare sector not only within China, but also in the European Union and the US, to rapidly develop new treatments and aftercare techniques, but more important, in terms of prevention," he said.

"The current injection of research funding must be sustained and must be part of a global collaborative effort in order to learn more about this group of pathogens and to develop effective vaccines. Just as the virus knows no borders, so our response also needs to be an international one."