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South China morning post
China’s economic expectations turned upside down by coronavirus
In late 2019, the economic debate in China centered on whether the country should aim for 6 percent growth the following year, a conversation that the coronavirus quickly turned upside down as the situation steadily worsened, first in China and later Worldwide, growth forecasts were slashed as the death toll rose. The revision of these increasingly pessimistic forecasts highlights how quickly assumptions were turned upside down by a disease that has now infected more than 84 million people and killed more than 1.8 million. and analysis of our Global Impact newsletter on the great stories that originate in China.In October 2019, the International Monetary Fund (IMF) forecast that the world economy would grow 3.4% in 2020, compared to 3% the previous year , while China’s economy would grow by 5.8%. Meanwhile, the World Bank projected that China would experience growth of 5.9 percent. At the time, these forecasts were of concern in some Chinese political circles. All eyes were on Beijing to see if the Chinese Communist Party could deliver on a commitment it made in 2012: to double the size of the economy over a decade by the end of 2020. Wuhan is now shaking up the dark days of the coronavirus. There was also some debate about whether the country should aim for 6 percent growth to avoid a slowdown, or whether it was an unnecessary and unrealistic target. But then a mysterious “viral pneumonia” was detected in Wuhan. Only 27 infections had been officially recorded as of the end of December and authorities said no person-to-person infections had been identified. By January 7 he had been identified as a member of the coronavirus family and two weeks later it was confirmed that he could while Meanwhile, the IMF had revised its growth forecasts, projecting 3.3 percent growth for the world economy and raising the Chinese figure by 0.2 points to 6 percent after Beijing reached a phase one trade deal with That same month, the World Bank confirmed its projection that China would grow by 5.9%, but the coronavirus, as the new disease would be known, was already spreading rapidly and causing the economy to sink to a slower. fast pace. stop. In the coming weeks, the first province of Wuhan and Hubei entered a strict lockdown, followed by most other Chinese cities. By March 5, when the disease began to spread around the world and most Chinese factories suspended production, IMF Managing Director Kristalina Georgieva said the organization had cut its growth prospects for China in 2020. below 5.6%. The World Health Organization did not declare the coronavirus a global pandemic until March 11, when more than 118,000 cases were reported in more than 110 countries. The agency was widely criticized at the time for acting too slowly to pool the world’s resources to fight the virus. Did half a million people in Wuhan contract the coronavirus? On March 31, the World Bank said the outbreak was expected to reduce China’s growth to 2.3% at best, but at worst, the country’s growth rate. In mid-April, just three months after January’s optimistic forecasts, the world was facing the worst economic recession in living memory. On April 14, the IMF said the world economy China, where production had started to resume after the outbreak peaked in the first quarter, was still projected to post positive growth, but this figure it had been revised down to 1.2%. The IMF and the World Bank both forecast that China’s economy would grow 1% in 2020, but by now the World Bank expected the world economy to contract 5.2% in 2020, the deepest recession since the Great Depression of the decade. 1930, and the IMF projected that global growth would contract by 4.9%, but the Chinese economy began to recover in the second half of the year after registering a contraction of only 1.6% in the first half of the year. Compared to the same period in 2019, the Organization for Economic Cooperation and Development predicted that it would be the only country in the Group of 20 that would register positive growth for the year, a projection that was shared by the IMF, which predicted in October that China would grow 1.9 percent. In the third quarter, the country posted growth of 4.9 percent and the fourth quarter figure is expected to be higher than that. Other positive signs were given in the export figures for November, which increased. 21.1 percent compared to the previous year, the highest revenue on record in US dollar terms, as the rest of the world turned to Chinese factories to produce the goods they couldn’t. In the United States, the economy expanded by 33.4 percent annualized. in the third quarter, driven by more than $ 3 trillion in economic relief from the government, following a record drop of 31.4 percent in the second quarter. Economists expect an annualized growth rate of 3.5 percent in the fourth quarter, But the US economy is still expected to contract 4.3 percent in 2020 as a whole, according to the latest IMF forecast. As a result of these contrasting recoveries, the Center for Economic and Business Research now expects China to outperform the UN More from South China Morning Post: * China’s economy may expand by 9 percent in 2021, helping to outperform US before * Xi Jinping praises China after coronavirus economic growth in New Year’s message * 2020 review: China’s economy weathered 12 turbulent months due to coronavirus impact * China detects first case of new variant of the coronavirus found in Britain * The success of China’s coronavirus increases confidence that its system is the best answer This article China’s economic expectations turned upside down by the coronavirus first appeared in the South China Morning Post For the latest news from the South China Morning Post, download our mobile app. Copyright 2021.
