Sino File | Coronavirus: think the worst is over for China’s economy? Not so fast
- Recent data has raised hopes of a slow recovery but the news might not be as good as it looks
- Debt, non-performing loans, bankruptcies and job losses are all likely to rise sharply in coming months
The Chinese economy’s plunge into negative growth is its first since it began its meteoric rise four decades ago.
However, even with its record 6.8 per cent contraction in gross domestic product in the first quarter of this year, the world’s second-largest economy still might outperform its developed peers, such as the European Union, the United States and Japan, all of which are expecting their greatest economic crises since the Great Depression in the 1930s.
Indeed, the Chinese collapse is likely to foreshadow even more painful scenarios for all the major developed economies.
China was until recently the world’s fastest-growing major economy, though it has suffered in recent years, going from a peak growth rate of 14.2 per cent in 2007 to just 6.1 per cent last year, its slowest rate of growth since 1990.
Now the world’s focus will be on whether China can post a slow recovery, as economic activities in the country have largely returned to normal.
Despite the disappointing quarterly figures, China’s economic activity showed a notable rebound in March. For instance, growth of industrial production, fixed asset investment and retail sales rebounded to -1.1 per cent, -9.4 per cent and -15.8 per cent year-on-year from -13.5 per cent, -24.5 per cent and -20.5 per cent in the January to February period.
