Asian Sky Quarterly 2021 Q4 - 25th Issue

QUARTERLY SURVEY
Early 2020 is the point that optimism showed the biggest difference between China the remainder of Asia-Pacific. This is most
likely due to the differing phases that the region was in with the coronavirus pandemic. Having been first identified in Wuhan
China right at the start of 2020, China moved swiftly to try and contain the virus, with various lockdowns implemented across
the country in cities with high caseloads. These were largely confined to the first half of the year, with the remainder of seeing
China’s economy rebounding.
However, it wasn’t until the second half of 2020 that the coronavirus really started to affect the rest of Asia-Pacific, and with it
came a drop in optimism across the region.
Below we take a look at some of the major events that have affected optimism in the region since the first ASQ at the end of 2015.
The Sino-US Trade War
The US-China trade war began in July 2018 under the administration
of then US President Donald Trump, and eventually led to tariffs being
placed on some US$550 billion of Chinese goods and US$185 billion
US goods.
The trade war had a direct effect on business aviation in the region,
especially in China, where aircraft utilization dropped by half.
This was very much noticeable in the number of business aircraft
flights between the US and China. As the trade war escalated, we
saw optimism from respondents drop off a cliff. This did temper
momentarily in Q4 2018 when it looked like the two sides might be
getting close to an agreement, however, optimism levels did not see
any meaningful increase until the first quarter of 2020 when a phase
one trade deal between the two sides was finally signed. However,
before that, optimism levels in Greater China were a lowly 29%. This
was partially caused by the protests that erupted in Hong Kong.
Hong Kong Protests
With optimism already low, an outbreak of protests in Hong Kong,
commonly referred to as the Anti-Extradition Law Amendment Bill
Movement, during 2019 caused another drop in optimism. The
protests, which began in March 2019 became increasingly violent as
more and more demonstrations happened. Shops and businesses
closed early when scheduled protests were due to take place, with
the Hong Kong economy taking a massive hit. Visitor numbers to
Hong Kong also dropped significantly, and at one point Hong Kong’s
International airport was closed due to a protest taking place. The
protests were due to continue into 2020, however, the outbreak of
the Coronavirus curtailed these.
The Coronavirus
The first Coronavirus cases were recorded right at the beginning
of 2020 in Wuhan, China. As a result, Wuhan, a city of 11 million
residents, went into lockdown to contain the virus as much as
possible. Unfortunately it had already begun to spread, and soon there
were outbreaks in other Chinese cities, as well as in other parts of
the world. However, economic optimism in Greater China showed
no signs of dipping, in fact, it began to grow. This could be because
of the low base it had to grow from, having reached a low point of
just 29% in the final quarter of 2019. Whilst the rest of the world was
grappling with the virus and seeing lockdowns and border closures,
China’s economic optimism kept increasing. This was also seen in the
country’s GDP growth. During the first and second quarters, industrial
output slowed, as firms in virus-hit areas had to temporarily close,
but by Q3 China’s GDP had begun its bounceback. This is very much
reflected in the optimism graph below, with optimism increasing right
the way through 2020 before plateauing in 2021.
FOURTH QUARTER 2021 — ASIAN SKY QUARTERLY | 7