The COVID-19 outbreak dragged the economy of China into its worst period in decades, while the road towards recovery would probably be too long. However, the country may still make a little go a long way with some growth this year, dissimilar to its Western economy rivals.
China’s economy has just experienced its worst three-month period in decades, as the coronavirus pandemic forced much of the country to shut down for weeks on end. https://t.co/mYmhplQaE5
— CNN International (@cnni) April 17, 2020
According to the statistics of the government released on Friday, the second-largest economy of the world shrank about 6.8% in the 2020 1st quarter as compared to 2019. Somewhat worse than experts polled by the expectation of Refinitiv and amounts to $98 billion (around 693 billion yuan) is lost output.
The world’s second largest economy contracted 6.8% in the first quarter of 2020, according to government statistics released. That’s even worse than the 6.5% decline that analysts predicted https://t.co/FipO2aDuty
— CNN Business (@CNNBusiness) April 18, 2020
China was already expecting contraction in Economy
However, China was already expecting contraction, and it is still a historic moment for China. The drop is the worst for one quarter that China recorded since it underway sharing those statistics in 1992. For the first time, China reported a contradiction in the economy since 1976, when the death of Mao Zedong, the leader of the Communist Party, ended a decade of economic and social tumult. The economy of China plunged 1.6% that year.
Three key engines of China for growth – consumer spending, exports as well as fixed asset investment – all popped as large swaths of China placed on lockdown restrictions in late January and at the start of February to contain the coronavirus spread. Retail expenses fell nineteen percent in the fourth quarter, whereas exports jumped over thirteen percent. On the other hand, the fixed asset investment plunged sixteen percent.
An indicator for the world
The quarterly economic report of China is, in some ways, a barometer for the U.S. and Europe that started to feel the severe impact of COVID-19 pandemic as the situation in China is improving on a daily basis. Beijing faced criticism for its suspected lack of transparency in the early days of the outbreak. China is reporting a shrink in the number of locally spread infections. After experiencing the positive results and things in control, the central government lifted the lockdown on Wuhan.
Still, China has to travel too long to return to normal. China is still imposing restrictions in many cities, even in those cities that lifts lockdown. Moreover, March’s economic statistics show an improvement over January and February, suggest the recovery is uncertain. Exports and industrial output, such as remained low as the rest of other world struggle with disruption due to the pandemic. The labor market of China continues to demonstrate signs of strain.
The unemployment rate in China that tracks the statistics of jobless people in just urban areas rushed to 5.9% in March – better than the second-month record high of about 6.2%, but still less than the 5.2% that China recorded in last December. It means around 6.3 million more people lose their jobs in March as compared to the previous year-end, according to the calculation of CNN Business using Chinese government data. However, the unemployment rate of the country is the main concern for the authorities of China.