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Chinese Economy Contracts 6.8% as Coronavirus Cases Revised Higher

CHINA'S ECONOMY contracted 6.8% during the first three months of the year from the year prior – representing the country's first and largest reported economic decline since it began formally reporting data in the 1990s.To get more latest china economy news, you can visit shine news official website.

The reported annual drop was less severe than many analysts expected – even as the country seems to have brought its coronavirus outbreak under control, reporting a little more than 83,000 cases and more than 4,600 deaths, according to the latest data from Johns Hopkins University.By comparison, the U.S. has reported more than 671,000 cases and more than 33,000 deaths and has a population that's less than a quarter the size of China's roughly 1.4 billion people.

"I think they are first in, first out amid this great COVID-19 recession," Robin Xing, chief China economist at Morgan Stanley, said Friday during an appearance on "Bloomberg Markets," suggesting that China is likely to see the "worst in the first quarter, followed by a relatively shallow U-shaped recovery from the second quarter onwards."

China has since lifted isolation measures across much of the country but had at points kept more than half of its population under some variation of stay-at-home orders. Still, the Chinese government has been criticized for its lack of transparency related to the coronavirus outbreak, and health experts have questioned the accuracy of its reported cases. On Friday, Chinese officials revised the coronavirus death toll in Wuhan – where the disease is believed to have originated – raising it by roughly 50%.
China's economic contraction in the first quarter suggests that, regardless of the size of its domestic coronavirus outbreak, the first three months of 2020 were the worst China has experienced on record.

"I think the bottleneck for recovery for the next stage has shifted to the demand side as lockdowns have been replaced in China by softer social distancing measures, which means people returned to work but they are not hanging out," Xing said.

China's quarterly economic decline and cautious consumer rebound foreshadows what's in store for the rest of the world as first and second quarter gross domestic product reports are released. Like in China, economic experts predict the bulk of the international damage will be accumulated early on in each country's individual outbreak, when lockdown measures are at their most prevalent. But as some European countries begin partially reopening in the coming days and weeks, Chinese consumers' reluctance to spend money suggests an immediate V-shaped recovery will not be in the cards for many world governments.
We think that the worst is behind us as the coronavirus outbreak has been contained in China. But lingering fear of the virus and uncertainty over income and job losses will weigh on consumption in the coming months," a team of economists at Oxford Economics wrote in a report published on Friday.

Oxford also points to China's reliance on international trade as another point of potential weakness going forward, given that much of the rest of the world is still scrambling to contain the outbreak. The White House on Thursday issued guidelines for how state governments should begin gradually reopening their regional economies, but most of the U.S. is still believed to be several weeks or months away from being able to do so.

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