The second largest economy in the world was the only major global power to avoid a recession this year, while the Coronavirus has forced companies to close and disrupt businesses around the world. China’s GDP is expected to grow by 1.6% this year, while the global economy as a whole will contract by 5.2%, according to the World Bank’s summer forecast.
China has built its relatively fast recovery through a number of measures, including a strict lockdown policy and a population tracking policy aimed at containing the virus. The government has also allocated hundreds of billions of dollars to major infrastructure projects, and has provided cash incentives to encourage spending among its residents. The gains are notable, as tourism and spending resumed during last week’s busy Golden Week holiday.
China’s share of global GDP is likely to rise 1.1% by the end of the year, according to CNN calculations using World Bank data, more than three times the share it gained in 2019.
In contrast, the United States and Europe will see their shares drop slightly.
The value of the Chinese economy is projected to be around $ 14.6 trillion by the end of 2020, equivalent to about 17.5% of global GDP.
Even without the disruption caused by the virus, China’s share would have risen this year, according to Larry Hu, chief Chinese economist at Macquarie Group. However, China’s ability to cope with the global trend is accelerating the growth of its importance to the global economy.
The economic improvement was no more noticeable than last week, when the state celebrated its annual Golden Week holiday. This season, China celebrated the founding of the People’s Republic of China and the Moon Festival, and it was one of the country’s busiest travel destinations during the year.
According to data from the Ministry of Culture and Tourism, nearly 80% of the number of those who traveled in the same period last year, more than 630 million people traveled across the country during the Golden Week that ended on Thursday.
Meanwhile, tourism spending recovered nearly 70% from a year ago, reaching $ 70 billion. Movie ticket sales totaled $ 580 million during the Golden Week holiday, 12% below the record set last year.
The figures for the holiday week are encouraging, Macquarie said, adding that “with the return of normality in mainland China, consumption, especially the consumption of services, is witnessing a significant recovery.”
However, even before the holiday, the Chinese economy recovered, when the official index of manufacturing activity rose to a 6-month peak in September. A special survey by the Caixin Media Group, which measures the performance of small businesses, showed that the sector continued to expand last month.
Service area works well, too. An official survey published last week showed activity at the highest level in nearly 7 years, while a Caixin survey showed services had one of the fastest expansion practices of the past decade in September.
Consumer spending also recovered with another encouraging sign. Economists earlier this year feared that China’s recovery was not overly balanced, having been driven by so many state-led infrastructure projects and a lack of consumer spending.
Lewis Coys, chief Asian economist at Oxford Economics, said that despite trade tensions, the Chinese economy has also enjoyed a vital role in global supply chains. The private research and advisory group also believes that China will increase its share of global GDP by one percentage point this year.
Although China’s recovery has been strong, challenges remain, as in other countries, the epidemic has taken a heavy toll on China’s rural and poor residents, according to the shooters.
The average monthly income collected by rural migrant workers decreased by nearly 7% in the second quarter compared to the previous year, according to World Bank estimates that used Chinese government data. Typically hundreds of millions of people fit this description work in construction, manufacturing, and other low-wage but vital activities in the country.
Low-income households in China – those with incomes below $ 7,350 a year – suffered the most steep declines in household wealth of any other income group, according to a survey by the Southern University of Finance and Economics and the Port Group.
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