By Elishya Perera
(CWBN)_As the COVID-19 pandemic continues to cripple economies, and the rest of the world is forced to close borders and impose lockdowns, China is the only major world power to avoid a recession.
According to the World Bank, China’s GDP is expected to grow 1.6% this year, while the global economy as a whole will contract by 5.2%. The Chinese government allocated hundreds of billions of dollars to deal with the economic impact of the pandemic, while imposing stringent lockdown and population tracking policies to control the spread of the virus. Accordingly, China’s economy is expected to be worth about $14.6 trillion by the end of 2020, roughly equivalent to 17.5% of global GDP.
According to the chief epidemiologist at the Chinese Center of Disease Control and Prevention, China had gone at least six weeks without reporting a single confirmed case domestically, which means the environment accessible by ordinary people is virus free. And in the past week, hundreds of millions of people in China went on vacation at the same time, during the eight-day national holiday known as the Golden Week, which began on 1st October. According to the state’s ministry of culture and tourism, during this period, tourism revenue totaled 466.56 billion Yuan (USD 69.5 billion). An employee at Wuhan’s Yellow Crane Tower attraction said, “We have seen more tourists this year than in previous years. The number of daily tourists has doubled since we exempted the entrance fee”.
However, this economic recovery may not be as promising as it appears. According to Leland Miller, the CEO of research firm China Beige Book, the recovery is not spread out evenly across the economy and there is no improvement on a year-on-year basis. China Beige Book is a private in-country data-collection network developed to track the Chinese marketplace.
According to an independent quarterly survey conducted on more than 3,300 businesses in China between August and September this year, it was discovered that revenue and profit in every region fell double digits in the third quarter compared to a year ago. It also showed that most provinces in the landlocked parts of the country saw output and domestic orders decline from the previous quarter, while growth was intact in the wealthier, coastal regions in the country.
Miller also pointed out that even though the state is coming out of the Coronavirus restrictions, firms aren’t borrowing as much as they should, and therefore questions what firms are seeing that’s making them hesitate. However, the economic boost given by the Golden Week suggests that the consumer sector, the final part of the recovery story, is revving up, and therefore, creates a room for optimism.
Edited by Chathushka Perera
