In a year like no other, Chinese economy emerges stronger from unprecedented test
Print Edition
China鈥檚 economy, the first jolted by COVID-19 pandemic, has bounced back from epidemic fallout with resilience on effective virus control and targeted stimuli, as a pandemic depression continues to threaten the world.
With GDP growth reaching 3.2 percent and 4.9 percent in the second and third quarters, the world鈥檚 second-largest economy completed the upward leg of a V-shaped recovery from virus-induced lockdowns that sent it into a rare 6.8-percent contraction in the first quarter.
In its latest Economic Outlook report, the Organization for Economic Co-operation and Development predicted that China will be the only major economy to record positive performance in 2020 with 1.8 percent growth.
By the end of 2021, global gross domestic product is projected to reach the pre-pandemic level, with China expected to account for over a third of world economic expansion, according to the report released on December 1.
As a more encouraging sign, China鈥檚 exports jumped 21.1 percent year on year in November in US dollar terms, the fastest growth since February 2018, thanks to strong demand for medical goods and electronics.
The brisk recovery has not been easy to come by. Refraining from hastily resorting to massive stimulus measures, China adopted a clear and consistent approach: containing the virus first with stringent public health measures and then rolling out monetary and fiscal policies to revive economic activities.
Rebound
China鈥檚 鈥減ost-COVID-19 rebound is gathering momentum amid a developed world that remains on shaky ground,鈥 Stephen Roach, a senior fellow at Yale University, said in an article published by Singapore-based news network Channel NewsAsia.
Roach attributed China鈥檚 quick economic recovery to the deployment of a 鈥淐OVID-19-first strategy鈥 where the country 鈥渋nsulates its citizens from a virulent pathogenic contagion with public health measures鈥 first and then 鈥渕akes judicious use of monetary and fiscal policy to reinforce the post-lockdown snapback.鈥
This is in sharp contrast with some developed countries where debates focused on using monetary and fiscal policies as front-line countermeasures, rather than taking public health measures to contain the virus in the first place, according to Roach.
Indeed, China set virus containment as a top policy priority at the beginning of the outbreak, concentrating medical resources and exercising strong epidemic control despite massive economic costs.
Factories were shut down, schools were closed and many contact-based services such as entertainment and travel were either fully stopped or shifted online to contain the spread of the disease. Masking, temperature monitoring and health QR code scanning have become new norms in the COVID-19 era in China.
When it comes to reopening the economy, China took a targeted and agile approach. Differentiated policies were adopted for economic and social order restoration in different regions, with areas with low-risk of COVID-19 encouraged to return to normalcy first.
Meanwhile, China seemed to be able to perform a delicate balancing act between virus containment and economic recovery.
The country鈥檚 fast recovery rests partly with the extraordinary macroeconomic policy mix of raising the deficit, tax relief, cuts in lending rates and banks鈥 reserve requirements.
Due to relentless job creation efforts, the country鈥檚 unemployment rate reached 5.3 percent in October, the lowest of the year.
In its third-quarter monetary policy report, China鈥檚 central bank pledged to make its prudent monetary policy more targeted and flexible to adapt better to the needs of high-quality development and put more focus on the efficiency of financial services to support the real economy.
The authors are Xinhua writers.
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