BEIJING, Dec. 7 (Xinhua) — China’s economy got off to a wobbly start in 2020, when it fell victim to the coronavirus and experienced a first-quarter slump. But as the year draws to a close, it is proving to be the fastest to emerge with an economic expansion for the whole year.
Thanks to a robust year-on-year growth of 4.9 percent in its gross domestic product (GDP) in the third quarter, the country’s economy expanded 0.7 percent in the first nine months, bucking a 1.6 percent contraction in the first half year and a 6.8 percent contraction in the first quarter when the virus took its toll.
In the latest World Economic Outlook report released in October, the International Monetary Fund (IMF) projected China’s economy would grow 1.9 percent in 2020, 0.9 percentage points above the IMF’s June forecast, which would make it the only major economy to see positive growth this year.
To contain the virus and restore the economy, China’s central leadership took resolute actions to stamp out the spread of the virus and introduced policies to stimulate growth; businesses employed adaptive tactics to survive the crisis; and the public united to observe health protocols. These actions were all indispensable to the country’s hard-won gains.
DECISIVE ACTION
Of utmost importance to China’s V-shaped economic rebound was the decisive and effective control of the epidemic, without which the quick recovery would have been impossible.
On Jan. 22, the central leadership ordered the immediate imposition of tight restrictions on the movement of people and exit channels in Hubei Province and its capital city of Wuhan, the epicenter of the outbreak.
Over the Spring Festival holiday which began in late January, hundreds of millions of people abandoned their holiday plans and remained indoors for weeks. Cities were locked down, businesses were closed and public gatherings were canceled.
In little more than a month, the accelerating spread of the virus was contained. In roughly two months, the daily increase in domestically transmitted coronavirus cases fell to single digits. And in approximately three months, a decisive victory was secured in the battle against the virus in Hubei and Wuhan.
China’s swift response created the conditions for the country to cautiously and gradually reopen factories, schools and tourist sites, and thus the economy’s quarter-on-quarter growth.
Though there have been a handful of sporadic outbreaks over the past few months, the Chinese government — with its experience and an approach characterized by speedy contact tracing and mass testing — has succeeded in rapidly cutting off transmission routes.
“China’s fast recovery continues thanks to resolute measures in combatting the virus, mitigating its impact, and supporting growth,” IMF Managing Director Kristalina Georgieva said in a statement at the conclusion of the fifth “1+6” Roundtable.
ECONOMIC TEST
Following the effective control of the virus is the test of restoring China’s hard-hit economy, which has faced headwinds both at home and abroad.
The government has rolled out a raft of macro-policy measures, including increased fiscal spending, tax reliefs, and lending rate and reserve requirement ratio cuts to stabilize industrial chains and employment.
To maintain stable liquidity while avoiding a flooded market, China’s central bank has put more focus on enabling structural policy tools, including re-lending and rediscount programs, to play a more effective role in stabilizing businesses and jobs.
China’s financial institutions are projected to save enterprises 1.5 trillion yuan (about 229.5 billion U.S. dollars) this year through measures to boost the real economy.
On the back of supportive policies, the industrial sector was among the first to rebound, with value-added industrial output posting the first expansion this year in April.
Recovery was uneven at first, but gradually broadened to more sectors including consumption and services as life and production normalized. China’s booming digital economy also played a vital role in the process.
Chinese internet and logistics companies have been leveraging their strong technological and supply chain management capabilities, as well as their large user bases, to help contain the virus and facilitate work resumption.
“The latest encouraging economic data from China gives us an insight into the recovery in store when a vaccine is developed and the outbreak is contained,” Mark Haefele, chief investment officer with UBS Global Wealth Management, said in a research note in October.
While some investors find it hard to look beyond rising case numbers and new lockdowns amid the second wave of COVID-19 across the West, “China’s recovery offers an encouraging precedent for the rest of the world,” said Haefele.
NEW DEVELOPMENT PATTERN
At the strategic level, China is adapting to the change by putting forward a new development pattern of “dual circulation,” in which domestic and foreign markets reinforce each other, with the domestic market as the mainstay.
While the concept may sound new, its underlying purpose of shifting the economy from an export- and investment-driven market to one focusing more on domestic demand is largely a continuation of goals the government laid out over a decade ago.
In 2019, China’s GDP per capita exceeded 10,000 U.S. dollars for the first time in history, indicating huge opportunities in the domestic market with a vast consumer base and growing supply capacities.
Analysts say that China’s continued opening-up efforts and deepening international cooperation under the new development pattern will offer more opportunities to the world and bring shared prosperity for all. Enditem
OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.
However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.
The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.
Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.
The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.
The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.
This report by The Canadian Press was first published Oct. 17, 2024.
OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.
In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.
The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.
Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.
In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.
It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.
This report by The Canadian Press was first published Oct 16, 2024.
OTTAWA – Statistics Canada says manufacturing sales in August fell to their lowest level since January 2022 as sales in the primary metal and petroleum and coal product subsectors fell.
The agency says manufacturing sales fell 1.3 per cent to $69.4 billion in August, after rising 1.1 per cent in July.
The drop came as sales in the primary metal subsector dropped 6.4 per cent to $5.3 billion in August, on lower prices and lower volumes.
Sales in the petroleum and coal product subsector fell 3.7 per cent to $7.8 billion in August on lower prices.
Meanwhile, sales of aerospace products and parts rose 7.3 per cent to $2.7 billion in August and wood product sales increased 3.8 per cent to $3.1 billion.
Overall manufacturing sales in constant dollars fell 0.8 per cent in August.
This report by The Canadian Press was first published Oct. 16, 2024.
