The coronavirus outbreak might be nearly over in China, but economic hardship is not
China reported today a 6.8% drop in gross domestic product (GDP) for the first quarter of 2020 compared with the same period last year. Even as life has started going back to normal in most of China, the road ahead for its economy still looks challenging.
It’s the first economic contraction for the country, once dubbed the world’s growth engine, since at least 1992, when Beijing started releasing quarterly GDP figures. Other estimates suggest that it is the first negative quarter China has had since 1976, which marked the end of the decade-long Cultural Revolution that pushed the Chinese economy to the edge of collapse.
China also reported a slew of other key economic data, which look equally grim. Retail sales, which declined by 20.5% on-year for January and February, decreased by 15.8% in March from a year ago. Fixed-asset investment outside rural households, which reflects construction activity, as well as industrial output, an important indicator for measuring economic performance, extended their losing streak from the first two months to drop 16.1% and 1.1% in March from the previous year, according to China’s National Bureau of Statistics.
The historic slump, mainly caused by China’s lockdowns of cities to contain the epidemic, first spotted in its central city Wuhan, lays bare what to expect even after relatively successful containment of the virus. While China is gradually re-emerging from the crisis, countries like the U.S. and Italy are repeating some of the worst nightmares China had in the early days of the outbreak, news of which was reportedly suppressed by Beijing initially. China now accounts for only 4% of the over 2 million confirmed coronavirus cases worldwide, compared with 32% for the U.S.
https://www.msn.com/en-us/money/markets/the-coronavirus-outbreak-might-be-nearly-over-in-china-but-economic-hardship-is-not/ar-BB12KJjV?li=BBnbfcN
