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China’s economic recovery is stronger than expected, predicted to grow by 1.9 percent in 2020, according to the latest World Economic Outlook report released by the International Monetary Fund(IMF) on October 13.
Compared with the earlier IMF report in June, this forecast on China’s economic performance is up by 0.9 percentage point, indicating accelerating recovery and a growth rate for the entire year might be higher than the IMF prediction.
The IMF has also assessed that the world economy is showing a positive tendency, and revised the recession rate from its earlier 4.9-percent estimate to 4.4 percent. But according to its projection, most developed and emerging economies will still be in recession, with China the only major economy to register growth.
Since the virus hit in January, the government spent three months on epidemic control and prevention with the most stringent measures. They included implementing strict quarantine rules countrywide, temporarily suspending economic operations, and shutting down Wuhan, capital city of the central province of Hubei where infections were first reported in China.
In March, when the situation began to be brought under control, work and production resumed in monitored phases with areas where the epidemic was less serious taking the lead.
In May, the disease was mainly under control across the country. The following months have been devoted to fostering economic growth. The government overcame the pressure of economic stagnation during the epidemic control period and made every effort to facilitate production resumption.
Despite the suddenness and seriousness of the epidemic, the Chinese economy suffered less than two months of shock. Some regions maintained growth even in that period. Wuhan lifted the shutdown on April 8, which means its economy was in suspension for less than three months.
Earthquakes, floods and epidemics are exogenous shocks to the economic system and normally do not cause a structural shock if they are not prolonged. The economy will rebound to normal rapidly after a disaster; sometimes it bounces back even more rapidly.
China’s GDP neared 100 trillion yuan($14.54 trillion) in 2019. It boasts a strong production capacity and a market with high potential thanks to its 1.4-billion population whose purchasing power is growing. Considering its economic vitality and resilience, the impact of COVID-19 will be mild from a long-term view.
Compared with the earlier IMF report in June, this forecast on China’s economic performance is up by 0.9 percentage point, indicating accelerating recovery and a growth rate for the entire year might be higher than the IMF prediction.
The IMF has also assessed that the world economy is showing a positive tendency, and revised the recession rate from its earlier 4.9-percent estimate to 4.4 percent. But according to its projection, most developed and emerging economies will still be in recession, with China the only major economy to register growth.
Policy priorities
The key to the Chinese economy taking the lead in recovery and maintaining its upward trend is taking the right policy priorities at the different stages of the novel coronavirus disease (COVID-19).Since the virus hit in January, the government spent three months on epidemic control and prevention with the most stringent measures. They included implementing strict quarantine rules countrywide, temporarily suspending economic operations, and shutting down Wuhan, capital city of the central province of Hubei where infections were first reported in China.
In March, when the situation began to be brought under control, work and production resumed in monitored phases with areas where the epidemic was less serious taking the lead.
In May, the disease was mainly under control across the country. The following months have been devoted to fostering economic growth. The government overcame the pressure of economic stagnation during the epidemic control period and made every effort to facilitate production resumption.
Despite the suddenness and seriousness of the epidemic, the Chinese economy suffered less than two months of shock. Some regions maintained growth even in that period. Wuhan lifted the shutdown on April 8, which means its economy was in suspension for less than three months.
Earthquakes, floods and epidemics are exogenous shocks to the economic system and normally do not cause a structural shock if they are not prolonged. The economy will rebound to normal rapidly after a disaster; sometimes it bounces back even more rapidly.
China’s GDP neared 100 trillion yuan($14.54 trillion) in 2019. It boasts a strong production capacity and a market with high potential thanks to its 1.4-billion population whose purchasing power is growing. Considering its economic vitality and resilience, the impact of COVID-19 will be mild from a long-term view.