Coronavirus or officially known as COVID-19 is the latest challenge for mankind in the 21st century. Every state in the world was hit by COVID-19 economically, socially and politically. Most of the countries are struggling to recover their economies after the COVID-19.
China is the world’s second largest economy and the birthplace of the virus. However, China is one of the countries that successfully overcame the Covid-19 pandemic and recovered their economy.
In this post, I’ll share some important facts about the Covid-19 and China’s economy.
China and Its Economy
The People’s Republic of China is situated in East Asia which is the world’s most populous country. The Chinese economy has had rapid growth in the last few decades. This rapid growth helped China to be throned as the world’s second largest economy.
In 1978, China began its program of economic reforms. At that time China ranked 9th in nominal gross domestic product with USD 214 billion. After 35 years China increased as the second place with a nominal GDP of USD 9.2 trillion.
Today, China can be recognized as an upper middle income country and the world’s second largest economy.
2020 year is very important to China and the Chinese communist party because the country was hope to transform into a Xiaokang shehui (小康社会）rendered in English as moderately prosperous society.
Under the xiaokang shehui, China expected to double the Gross domestic product (GDP) and disposable income what they were in 2010. Also China wanted to make sure no citizens would be living under the national poverty line of 2300 RMB per year at 2010 prices.
China and Covid-19
China successfully fought with the Covid-19 even Wuhan province was the birthplace for the pandemic. There are many steps that China has followed to combat the virus.
- Mass testing ( free of charge)
- use of quarantine
- physical distancing
- Adoption of technology to track the spread of the virus.
- Built two new hospitals
- Postponed non urgent medical care
- Transparency, solidarity and logistics
- Boosting medical supplies
These are some actions taken by Chinese government to combat Covid-19.
China’s Economy during the Pandemic.
According to the data released by the Chinese government, 6.8% of China’s first quarter GDP was dropped during the pandemic.
The unemployment rate also increased in China by only a little. At the month of January in 2020, which can be recognized as the early stage of the pandemic, the unemployment rate in China was 5.3% and early in the month of June it was 6%.
But there are some debates about the statistical data released by Chinese government about the unemployment rate. Some analysts showed the unemployment rate in China can reach 12%.
The results of the economic contractions in China were highly affected for the rural migrants. Many of the migrant workers lost their jobs because of the factory stoppages or shop closing.
When considering the industrial production in China, manufacturing output of the first quarter in 2020 was dropped by 14.1% on a year over year basis. Many Chinese industries experienced negative growth rates. Motor vehicles were 27.3% and textiles were 22.5%.
When considering the imports and exports of China, exports have fallen in total by 9% from January to April while imports have dropped by 5.9%. But from April, exports rose by 3.5% from a year earlier because of the higher demand for medical supplies.
China and the Post Covid-19 period
As mentioned earlier, China successfully overcame the Covid-19 challenge and recovered its economy also.
The exports grew 3.5% in April 2020 year on year in China. Global demand for medical supplies such as face masks helped to recover the exports in China.
In the month of May, China announced that they will not set an economic growth goal for 2020 due to the pandemic. This can be considered as the first time that Beijing has not had a GDP goal since 1990.
Secondly, the Chinese government announced fiscal measures that analysts say will equal to about 41% of China’s GDP.
On the other hand, the important matter is that the Chinese Communists party (CCP) have shifted their focus from quantitative economic growth to Socio economic advancements.
This figure shows the Chinese economy after the pandemic situation. It is higher than the experts predicted about China’s economy. It shows a “V” shaped recovery which can be identified as a sharp fall followed by a quick recovery.
Also, China needs to follow the steps given below to strengthen their economy further.
China can be identified as a tech giant in the international system. In order to achieve a quick recovery, China should develop new infrastructure such as 5G networks, charging stations and energy efficiency programs and other initiatives.
Chinese government has taken some important measures to revive investments and protect jobs after COVID-19. Beijing has been encouraging banks to lend more money for smaller firms which are struggling due to the economic contraction.
Electric vehicle industry also can be identified as an energy drink for the Chinese economy in future. China is the world’s largest electric car market which has 3.8 million electric vehicles at the end of 2019. Many experts believe increasing the investments in expanding electric vehicles charging infrastructure will help boost electric vehicle sales.
Chinese President Xi Jinping revealed the idea of Dual circulation. The main aim of the dual circulation strategy is to remove the dependence on foreign Markets and Technology in its long-term development.
China is surely becoming a giant in the world and it’s very likely for this nation to take over the world as the leading economy. Let’s keep a close eye on its progress and see where it leads.
You can also read my previous articles about the Hidden agenda of the Chinese medical diplomacy to learn more about China’s diplomacy Coronavirus- a hit for the Global Economy? The role of China towards South Asia,
Image credits: Freepik.com and BBC
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