---
title: "Some Thoughts During This Epidemic"
description: "In his book \"The Low Desire Society,\" Kenichi Ohmae describes several phenomena in Japan's lost decade, where the economy stagnated and politicians were helpless. Despite various stimulus policies and massive infrastructure investment, the economy failed to grow significantly, and even with negative interest rates, savings increased rather than decreased. The elderly with savings feared spending, while young Japanese men lacked ambition, leading to a vicious cycle. The core issue, as Ohmae notes, is that the Japanese people lost confidence in the future. Returning to the epidemic, China's first-quarter domestic consumption fell 6.8% year-on-year, but instead of revenge spending, people are making revenge savings, with RMB deposits increasing by 8.07 trillion in the first quarter, resembling Japan's lost decade."
author: "赵波"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2020-04-20"
language: "en"
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---

# Some Thoughts During This Epidemic

> In his book "The Low Desire Society," Kenichi Ohmae describes several phenomena in Japan's lost decade, where the economy stagnated and politicians were helpless. Despite various stimulus policies and massive infrastructure investment, the economy failed to grow significantly, and even with negative interest rates, savings increased rather than decreased. The elderly with savings feared spending, while young Japanese men lacked ambition, leading to a vicious cycle. The core issue, as Ohmae notes, is that the Japanese people lost confidence in the future. Returning to the epidemic, China's first-quarter domestic consumption fell 6.8% year-on-year, but instead of revenge spending, people are making revenge savings, with RMB deposits increasing by 8.07 trillion in the first quarter, resembling Japan's lost decade.

In his book "The Low Desire Society," Kenichi Ohmae mentions several phenomena in Japan's lost decade: the national economy stagnated, and many Japanese politicians were at a loss. The government's various economic stimulus policies, including massive infrastructure investment, eventually led to the repair of coastal highways that even pigeons couldn't cross, making them spacious and clean, but the economy still couldn't grow on a large scale. Even with helicopter money and negative interest rates, people's savings increased rather than decreased.

**On one hand, the elderly who have the ability to consume hold large deposits but fear illness and dare not spend; on the other hand, Japanese men born in the 1990s, due to a stable economic and social environment, lack the desire to strive and the motivation to change their destiny. They live simply, don't spend money, don't socialize, don't marry, and start saving for retirement at age 30.** Their activity radius doesn't exceed 5 kilometers, their social circle is limited to high school friends, and their shopping is confined to Aeon shopping centers. These men are called "herbivore men," and the Japanese economy has fallen into a vicious cycle.

Finally, Ohmae points out the core of the problem: **the Japanese people have lost confidence in the future.**

Returning to the topic of the epidemic: **The government announced that first-quarter domestic consumption fell 6.8% year-on-year, but we see that in the face of uncertainty, people are not engaging in revenge spending but rather revenge saving. In the first quarter, RMB deposits increased by 8.07 trillion yuan, which is very similar to the economic characteristics of Japan's lost decade.**

Our generation, born in the 1980s, has not actually experienced an economic cycle and doesn't know how market fluctuations and downturns will affect us individually. While enjoying the dividends of nearly 40 years of rapid national growth, many post-80s and post-90s (born before 1995) have already married and had children, and with aging parents, most are burdened with high mortgage, car loan, education, and medical pressures.

**Under high debt and high expenditure, once encountering an uncertain cycle, this generation is actually unable to withstand the volatility caused by unstable income.**

Many post-95s, lacking social judgment, are fooled by various financial institutions into borrowing large amounts to buy trendy electronic products, fashionable clothing, game cards, and other consumer goods. With unstable jobs, they end up burdened with debt. The epidemic has caused these problems to erupt prematurely.

Because of the epidemic, people are filled with anxiety about the huge uncertainty of the future, dare not spend, and save any income first. This passively pushes the economy into a deflationary state, and this state cannot be solved simply by releasing liquidity.

**1. For safety reasons, eat out as little as possible.**
**2. At work, communicate online as much as possible and avoid going out, saving even on clothes.**
**3. Girls don't need to go out every day, so they use less makeup.**
**4. Children can't attend various specialty classes, so tutoring expenses are reduced.**
**5. Some people worry about unemployment and mortgage defaults, so they don't dare spend freely.**
**6. Those with spare money planned to invest, but seeing such volatile market conditions, they deposit it in the bank until the economy stabilizes.**
**7. Business owners find it increasingly hard to make money, so they avoid hiring and updating equipment as much as possible.**

For many enterprises, the impact of this epidemic is actually very profound. Industries such as tourism, hotels, catering, and entertainment are hit hard. Abroad, the epidemic will also cause a large contraction in consumption, and the bullwhip effect will affect the upstream of the supply chain.

Many business owners judged that the economy would recover quickly after the epidemic, so they didn't lay off staff or shrink operations but maintained the status quo. But today, we see: **we may need to reassess the economy and response measures under the normalization of the epidemic.**

**1. Reconsider the impact on your industry and sector over the longer period from the epidemic onward.**
**2. Prioritize reducing investment and lowering the risk coefficient of investments.**
**3. During the epidemic, control all expenditures and costs to maintain cash flow continuity.**
**4. Appropriately lay off staff, cutting those who are dispensable.**
**5. Pay attention to the operating status of upstream and downstream customers, manage receivables and payables, and respond promptly based on actual conditions.**
**6. Appropriately seek new business opportunities; even small profits you previously ignored should be considered.**
**7. In existing stable businesses, see how much incremental opportunity can be tapped.**
**8. Pay attention to national policies, actively strive for tax and social security reductions for your enterprise.**
**9. Encourage internal innovation and entrepreneurship; appropriately encourage and support new opportunities and risk-taking talent.**
**10. Calmly and objectively "pick up bargains," but not every business is something you can handle.**

Of course, this is the pessimistic side. We should also see that the country is actively responding. Besides introducing various policies and regulations to reduce taxes for small and medium-sized enterprises, it is also vigorously investing in infrastructure, especially new infrastructure. Many local governments are actively distributing cash vouchers to stimulate consumption. These are good measures.

I want to view the impact of the country's new infrastructure from a longer cycle.

**China's rapid growth in recent years is inseparable from the massive infrastructure investment in 2008 to stimulate the economy.** At that time, projects like high-speed rail and highways were launched. In the short term, it's hard for the country to see huge returns, but infrastructure like high-speed rail, highways, and 4G has greatly reduced the cost of information and energy exchange in society.

**Society is an organism, and the speed of information and energy exchange essentially represents the activity level of the entire organism.**

Although this hasn't directly benefited every ordinary person, we must see that almost every aspect of our lives today is influenced by the infrastructure built back then. The WeChat articles you read, food delivery, Tmall shopping, using Didi when you go out, and taking high-speed rail—all benefit from the convenience and advantages of new infrastructure.

This epidemic has changed people's thinking and living habits. New consumer demands such as online education, remote work, and online shopping and entertainment have surged, making the country pay more attention to investment and support for 5G. This will further accelerate investment and development in big data, IoT, artificial intelligence, and other fields.

For individuals and enterprises, we should move our businesses onto the new infrastructure as soon as possible. When comparing old and new, don't just look at scale; recognize that new infrastructure represents a higher dimension, a more advantageous competitive tool, and a stronger ecological niche.

**The epidemic has been a non-continuous event for every enterprise. It cannot change anything, but it will accelerate the trend where the strong get stronger. Those that survive will be more competitive, more adaptable, and more advanced species.**

| Founder of New Distribution
FMCG industry channel expert, author of over 400,000 words of FMCG industry research articles
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