Beijing, China (CWBN)_While the global economy faces a critical crunch due to the Covid-19 pandemic, which according to the World Bank could have implications years after the health crisis is dealt with, the Chinese economy continues to indicate positive gains. It is also the only major economy to start a process toward recovery.
Statistics indicate that the economy has made a recovery of 4.9%, 0.3% below expert forecasts for the last quarter of 2020. This follows the crude drop of 6.8% following the outbreak of the pandemic, which caused nationwide shutdowns. It is the first recession faced by the Chinese economy since 1992, and forced the Chinese government to roll out stimulus packages to sustain local businesses.
The development follows reports of imports gathering a momentum by 13.2% and exports by 9.9% in September, however, the growth was attributed to the increased demand for protective gear and medical equipment that has surged over the past months. It is expected to reach a fall as the pandemic reaches a conclusion.
Trade war
Embroiled in an escalating trade war with the US, the Chinese Government has made it a priority to boost the local retail sectors yet recovery appears to be occurring at an exceptionally slow pace. Moreover, the increase domestic tourism is said to have provided the economy with an unintended leg-up, particularly during the “Golden Week” as international travel remains fractured.
Adding to China’s concerns is the backhand dealt by the G-20 decision to suspend debt collection for a period of six months from developing states, which were hard hit by the pandemic. In accordance with the World Bank’s recommendations, the suspension was intended to liberate national level assets in these economies in order to channel them toward containing the health crisis.
As expected the decision was made amidst strong Chinese objections, as it imposes a dampener on its widely criticised Belt and Road Initiative that has forced many low-income states into a debt trap. Ironically however, the Communist Party has continued to keep up with its forced generation of global influence through new loan deals, the latest of which was referred to as a grant paid to the Sri Lankan Government at 90 million USD earmarked for rural development, while talks for an additional 500 million USD sit on the burner.
