China economy expects rebound in second half after coronavirus delivered hardest blow

17, Mar. 2020

Photo by Clay Banks on Unsplash
Photo by Clay Banks on Unsplash

TOKYO, NNA – China is experiencing its worst economic storm since the turn of the millennium after the deadly coronavirus outbreak battered significant swathes of its markets.

China’s industrial production, retail sales and fixed asset investment all plunged to unprecedented lows in the January-February period, contracting for the first time over last two decades.

In the throes of shutdowns and coping with overwhelming cases of infection and deaths during the two months, industrial output fell 13.5 percent from a year ago while retail sales plummeted 20.5 percent.

The coronavirus panic hammered stock markets, knocking down investment by a steep 24.5 percent.

The latest figures on the historic slump released by China’s National Bureau of Statistics on Monday also showed stark differences from previous catastrophes. China’s major economic activities did not suffer contraction during the SARS epidemic 17 years ago and the global financial crisis in 2008.

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More people in the world's second largest economy also went jobless this year as unemployment rate rose 6.2 percent in February, up from 5.2 percent in December, which saw China reporting an outbreak of a pneumonia of unknown cause in Wuhan city to the World Health Organization at the end of that month.

At a press conference, Mao Shengyong, a spokesman for the National Bureau of Statistics, said that the economy was running well before Jan. 23, just before the start of the Chinese New Year break.

The lockdown of Wuhan, the epicenter of the global viral crisis, and other cities subsequently triggered massive disruptions that caused the domestic economy to go downhill.

Across the country, corporations were ordered to suspend factory operations even after the new year break resulting in restriction on movement of logistics and travel.

In the industrial sector, the worst hit is automobile manufacturing which tumbled 31.8 percent in the January-February period.

Also badly devastated were restaurants, which saw sales plunged 43.1 percent. Online goods sales, however, grew 3 percent as shoppers opted for cheaper buys from online than brick-and-mortar stores.

On a brighter note, Mao said economic activities are likely to recover in March as companies has already resumed factory operations.

He also expressed confidence that the rise in activities in February and March would vitalize the April-June quarter and that the Chinese economy would get back to a normal track in the second half of this year, helped by the government stimulus measures.