China’s GDP Data Shows How It Is Winning The Covid-19 War Amid Global Recession | Economy Explained
From being the first country where the Covid-19 virus was detected, China is all set to become the only major economy in the world that will grow in 2020. China’s gross domestic product (GDP) expanded 4.9% in the July-September quarter, according to statistics released by the country’s National Bureau of Statistics. Given its position as the world’s second largest economy, China’s V-shaped recovery has generated hopes of a rare growth cushion across the globe.
China’s economic turnaround after the pandemic’s impact has followed a V-shaped recovery pattern. Its GDP contracted by 5.3% in the January-March quarter, grew 3.2% in April-June, and further improved in July-September. While the September quarter figure is lower than the 5.2% estimated by a Reuters poll of analysts, China is all set to become the only major country to escape a GDP contraction this year, Eswar Prasad, an economist from Cornell University, told the Financial Times. The International Monetary Fund (IMF) has predicted that China’s GDP will grow 1.9% this year in its World Economic Outlook released earlier this month.
China’s GDP turnaround has been “stoked by a state-backed industrial boom,” the Financial Times said. Industrial production grew 6.9% in the September quarter, it reported. A look at the Purchasing Managers’ Index (PMI) number for China shows that the Covid-19 pandemic might actually have given a boost to industry. PMI manufacturing was lower than 50 from May 2019 to October 2019 , 50.2 in November and December 2019 and 50 in January 2020 before it collapsed to 35.7 in February. A PMI value above 50 signifies expansion in economic activity. The post-February numbers are actually better than what they were last year.
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