Connect with us

Asia Pacific

Chinese Economy In Doldrums; GDP Contracts 6.8% In The First Quarter Due to Covid-19

Published

on

China, the world’s second-largest economy appears to be in doldrums after the National Bureau of Statistics said that the country’s economic output shrank 6.8 percent from January through March compared to the same period last year. 

US, UK Intelligence Agencies Again Pin China For Spreading Covid-19 Pandemic

The coronavirus pandemic which severely hit the country might have eased down a little but an economy is still hurt.

Once called the world’s growth engine, China is now about witness a 6.8% drop in GDP compared to the first quarter of 2019. Several estimates also suggest that this is China’s first economic shrinkage since it first started publishing quarterly data on GDP in 1992.

A full year of economic depreciation was recorded at the end of the Mao-era in 1976. The pandemic which has put China’s massive export sector on a grinding halt has also left the industrial production disrupted.  Almost every economic data in recent months has indicated a fall in the economy.

“Due to the protracted postponement of the reopening of offices and factories in February, China’s real GDP growth rate is estimated to contract sharply in [the first quarter of] 2020,” Rajiv Biswas, Asia Pacific chief economist at IHS Markit told Al Jazeera. 

The level of value added to goods and services – a measure of economic productivity – was weaker than the lowest reading during the 2008 financial crisis, he added. Millions of migrants who work in the factories are still stuck in quarantines or in their hometowns fearing their safety.

If people can’t be convinced to start spending money again, “the demand shock may spread to East Asia and then to Europe and the U.S. — and the world may face a disaster,” said Cao Heping, a Peking University economist talking to New York Times.

Julian Evans-Pritchard, a senior Chinese economist at Capital Economics said in a note to clients that sectors that were among the best placed to weather the COVID-19 disruption such as post, telecommunications, and software have seen their sales drop.

Among the worst-hit sectors are the cinema revenue, long-haul travel, subway traffic, and car sales.  The economy remained to be disrupted for much of February with factories and shops closed and workers stranded at home.

In these disturbing times, not all experts point towards an economic shrinkage. Iris Pang, Greater China economist at ING, forecast a 3.6 percent growth in China’s GDP in the first quarter.

Pointing out to the fact that tax and fee cuts that have been implemented since the outbreak, she said it could give revenue starved businesses a much-needed lifeline in an email exchange with  Al Jazeera.

“March’s activities recover quite well. Electricity consumption in March was higher than that in 2019, signaling that industrial production growth could be a positive year on year growth,” Pang added.

The Chinese government has left no stone unturned to boost the economy for the second quarter. A number of stimulus measures including credit support for firms and infrastructure investments have been announced.

Advertisement
Advertisement

Facebook

FEATURED

usa-taiwan usa-taiwan
Asia Pacific4 hours ago

Amid China Threat, Taiwan’s First Homegrown Submarine To Be Equipped With US’ Torpedoes, Harpoon Missiles

Amid China’s muscle-flexing, Taiwan has started building its first indigenous submarine. The Island nation will be receiving imported components for...

ROBOT-SOLDIERS ROBOT-SOLDIERS
EurAsian Region4 hours ago

Russian Army Receive 1st Batch Of Deadly ‘Terminators’ That Can Spread Terror On The Battleground

The Russian Ministry of Defense announced that its military had received the first batch of Terminator tank support fighting vehicle...

F-35-INDIA F-35-INDIA
Featured6 hours ago

Did Russian Missiles ‘Hit’ F-35 ‘Stealth’ Fighter Jet Operated By The Israeli Air Force Over Syria?

The world has its eyes on the new American F-35 jet that has already cemented its place in the elite...

Chandrayaan-2 Chandrayaan-2
Asia Pacific10 hours ago

India’s Venus Orbiter ‘Shukrayaan’ May Get A Piggyback Ride On Heavy-Duty Rocket, GSLV-Mk III

In September, NASA administrator Jim Bridenstine had said it’s time to prioritize Venus, one of our closest planetary neighbors. His...

INDIA-PAKISTAN INDIA-PAKISTAN
Featured11 hours ago

Pakistan Hits Out At India For War-Mongering Even During Covid-19 Pandemic

Pakistani foreign minister lambasted arch-rival India and – said that some countries, including India, defied international calls for peace and...

INDIA-CHINA INDIA-CHINA
Asia Pacific12 hours ago

Chinese PLA Deploys ‘Assault Boats’ In Pangong Lake After Indian Army Stations MARCOS Commandos?

As Indian and Chinese diplomats and top military commanders are trying ways to disengage in the Ladakh region, there are...

rafale-jets rafale-jets
Asia Pacific15 hours ago

Indian Rafales ‘Far Superior’ To Pakistan’s JF-17 Thunder — Chinese Military Experts Make Rare Admission

In what seems to be a rare admission, Chinese experts have said that the French-built Rafale fighter jets, procured by...

china-moon-mission china-moon-mission
Featured15 hours ago

ISRO’s Chandrayaan Looks To Catch-Up In Space Race As China Surges Ahead With Chang’e-5 Moon Mission

China’s Chang’e-5 probe has successfully landed on the moon, in a landmark mission to bring lunar surface samples back to...

US-CHNA-WORLD-WAR US-CHNA-WORLD-WAR
Americas24 hours ago

Why Is The US Constructing A New Military Base Right Next To Its Biggest Airbase Near China?

With its eyes on China, the US Department of Defense (DoD) will build an alternative military base on Tinian island,...

Americas1 day ago

The US ‘Apple’ Turns Sour As China’s Xiaomi Heads For Global Domination In Smartphone Markets

Xiaomi replaced Apple for the first time to reach the third spot globally, after Samsung and Huawei, in the list...

Advertisement
Advertisement