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| China’s Economy Shrinks, Ending a Nearly Half-Century of Growth | China’s Economy Shrinks, Ending a Nearly Half-Century of Growth |
| (6 days later) | |
| BEIJING — The coronavirus outbreak has brought China’s extraordinary, nearly half-century-long run of growth to an end — a stark reminder of the enormous task ahead for world leaders trying to restart the global economy. | BEIJING — The coronavirus outbreak has brought China’s extraordinary, nearly half-century-long run of growth to an end — a stark reminder of the enormous task ahead for world leaders trying to restart the global economy. |
| Chinese officials on Friday said that the world’s second-largest economy shrank 6.8 percent in the first three months of the year compared with a year ago, ending a streak of untrammeled growth that survived the Tiananmen Square crackdown, the SARS epidemic and even the global financial crisis. The data reflects China’s drastic efforts to stamp out the coronavirus, which included shutting down most factories and offices in January and February as the outbreak sickened tens of thousands of people. | Chinese officials on Friday said that the world’s second-largest economy shrank 6.8 percent in the first three months of the year compared with a year ago, ending a streak of untrammeled growth that survived the Tiananmen Square crackdown, the SARS epidemic and even the global financial crisis. The data reflects China’s drastic efforts to stamp out the coronavirus, which included shutting down most factories and offices in January and February as the outbreak sickened tens of thousands of people. |
| The stark numbers make clear how monumental the challenge of getting the global economy back on its feet will be. Since it emerged from abject poverty and isolation more than 40 years ago, China has become perhaps the world’s single most important growth engine, one that lifted fortunes during previous times of trouble, like the financial crisis. | The stark numbers make clear how monumental the challenge of getting the global economy back on its feet will be. Since it emerged from abject poverty and isolation more than 40 years ago, China has become perhaps the world’s single most important growth engine, one that lifted fortunes during previous times of trouble, like the financial crisis. |
| Now China is trying to restart its vast, $14 trillion economy, an effort that could give the rest of the world a much-needed shot in the arm. The coronavirus’s spread to the United States and Europe, which froze the economies there, has led to forecasts that the world’s output could shrink far more this year than it did even during the financial crisis. | Now China is trying to restart its vast, $14 trillion economy, an effort that could give the rest of the world a much-needed shot in the arm. The coronavirus’s spread to the United States and Europe, which froze the economies there, has led to forecasts that the world’s output could shrink far more this year than it did even during the financial crisis. |
| That global halt will, conversely, hurt China’s efforts to get back on track, creating a difficult economic puzzle for top leaders in Beijing. The pandemic and attempts to contain it have sharply cut the world’s appetite for China’s goods, which could lead to factory shutdowns and worker furloughs even as the country tries to get back to business. | That global halt will, conversely, hurt China’s efforts to get back on track, creating a difficult economic puzzle for top leaders in Beijing. The pandemic and attempts to contain it have sharply cut the world’s appetite for China’s goods, which could lead to factory shutdowns and worker furloughs even as the country tries to get back to business. |
| China has gradually lifted many of its limits on work and travel in recent weeks. But businesspeople across China say that times remain difficult. Families say their incomes have fallen. | China has gradually lifted many of its limits on work and travel in recent weeks. But businesspeople across China say that times remain difficult. Families say their incomes have fallen. |
| “This year is difficult — some have lost their jobs, some cannot find work to do,” said Liu Xia, a fruit vendor from a village on the northern outskirts of Beijing. “Those who do go to work and those who are still in business are greatly affected.” | “This year is difficult — some have lost their jobs, some cannot find work to do,” said Liu Xia, a fruit vendor from a village on the northern outskirts of Beijing. “Those who do go to work and those who are still in business are greatly affected.” |
| The contraction, announced on Friday morning in Beijing by China’s National Bureau of Statistics, is the first economic shrinkage acknowledged in official statistics since 1976, when the country was in the final days of the Cultural Revolution, a national spasm of urban violence and torture. | The contraction, announced on Friday morning in Beijing by China’s National Bureau of Statistics, is the first economic shrinkage acknowledged in official statistics since 1976, when the country was in the final days of the Cultural Revolution, a national spasm of urban violence and torture. |
| China’s historic growth streak was fueled by the creation of an extensive, modern network of highways and railways, the strong entrepreneurship of its people, its skilled work force and a government that was willing to set environmental and labor concerns aside for the sake of ever-greater economic output. But those factors were no match for the coronavirus, which, after it first emerged from the city of Wuhan in late December, ground the country’s huge engine of industry to a virtual halt. | China’s historic growth streak was fueled by the creation of an extensive, modern network of highways and railways, the strong entrepreneurship of its people, its skilled work force and a government that was willing to set environmental and labor concerns aside for the sake of ever-greater economic output. But those factors were no match for the coronavirus, which, after it first emerged from the city of Wuhan in late December, ground the country’s huge engine of industry to a virtual halt. |
| Beijing’s options are limited. It has so far avoided unfurling a huge spending package like leaders in the United States and Europe have done. Its economy has become too big and complex to easily restart like it did in 2008, when it unveiled a plan to spend more than half a trillion dollars. Years of easy lending have also left local governments and state-run companies mired in debt. | Beijing’s options are limited. It has so far avoided unfurling a huge spending package like leaders in the United States and Europe have done. Its economy has become too big and complex to easily restart like it did in 2008, when it unveiled a plan to spend more than half a trillion dollars. Years of easy lending have also left local governments and state-run companies mired in debt. |
| Yet China’s leaders face pressure to act. Withering household incomes have caused families to retrench their spending. Han Xiaojuan, a 35-year-old who has a small shop selling jackets and slippers, said many people were only buying necessities these days. | Yet China’s leaders face pressure to act. Withering household incomes have caused families to retrench their spending. Han Xiaojuan, a 35-year-old who has a small shop selling jackets and slippers, said many people were only buying necessities these days. |
| “I’ve been in this business for more than 10 years in Beijing,” Ms. Han said. “This is the worst of times.” | “I’ve been in this business for more than 10 years in Beijing,” Ms. Han said. “This is the worst of times.” |
| China has eased up on its most drastic measures against the epidemic. Last week a stringent lockdown ended in Wuhan, where the outbreak began. | China has eased up on its most drastic measures against the epidemic. Last week a stringent lockdown ended in Wuhan, where the outbreak began. |
| Yet many social distancing measures remain. From restaurants to passenger planes to trains, many seats may no longer be used, which limits sales. Shopping malls and sidewalk shops still have less foot traffic than usual, as many people stay home, wary of infection. | Yet many social distancing measures remain. From restaurants to passenger planes to trains, many seats may no longer be used, which limits sales. Shopping malls and sidewalk shops still have less foot traffic than usual, as many people stay home, wary of infection. |
| The continued effect of the epidemic showed up in other data released on Friday morning, reflecting the country’s economic performance in March. That data, like statistics on imports and exports that were released on Tuesday, showed that the economy has begun to recover but still has a considerable distance to go. | The continued effect of the epidemic showed up in other data released on Friday morning, reflecting the country’s economic performance in March. That data, like statistics on imports and exports that were released on Tuesday, showed that the economy has begun to recover but still has a considerable distance to go. |
| Industrial production slipped 1.1 percent in March compared to a year ago, while retail sales fell 15.8 percent. Investment in fixed assets was down 16.1 percent for the first three months of the year compared with last year. | Industrial production slipped 1.1 percent in March compared to a year ago, while retail sales fell 15.8 percent. Investment in fixed assets was down 16.1 percent for the first three months of the year compared with last year. |
| “Given the continuous spread of the epidemic globally, mounting downward pressure on the world economy and growing uncertainties, we are now facing heightened pressures,” said Mao Shengyong, the spokesman of the National Bureau of Statistics, at a news briefing in Beijing on Friday morning. | “Given the continuous spread of the epidemic globally, mounting downward pressure on the world economy and growing uncertainties, we are now facing heightened pressures,” said Mao Shengyong, the spokesman of the National Bureau of Statistics, at a news briefing in Beijing on Friday morning. |
| The next blow for China’s economy could come from weakening global demand for its exports. | The next blow for China’s economy could come from weakening global demand for its exports. |
| The Canton Fair is the country’s main export event, featuring tens of thousands of exhibitors and hundreds of thousands of buyers from around the world. It was supposed to start on Wednesday of this week and last until early May. Instead, it is slated to be a more modest, online event in mid-June. | The Canton Fair is the country’s main export event, featuring tens of thousands of exhibitors and hundreds of thousands of buyers from around the world. It was supposed to start on Wednesday of this week and last until early May. Instead, it is slated to be a more modest, online event in mid-June. |
| Even Chinese businesses with existing overseas customers are finding that many buyers want to postpone or cancel deliveries. | Even Chinese businesses with existing overseas customers are finding that many buyers want to postpone or cancel deliveries. |
| “The delays in orders are occurring everywhere,” said Aaron Yang, owner of Arnan Fashion Jewelry, an earrings exporter in Yiwu, in east-central China. | “The delays in orders are occurring everywhere,” said Aaron Yang, owner of Arnan Fashion Jewelry, an earrings exporter in Yiwu, in east-central China. |
| Wu Jianying, the owner of Fang Weimei Toys, a water pistol exporter in Yiwu, said that this should be the busiest time of year for her exports, as retailers in the West prepare for the summer swimming pool season. But retailers have stopped placing orders. Some have even stopped wiring money for existing orders. | Wu Jianying, the owner of Fang Weimei Toys, a water pistol exporter in Yiwu, said that this should be the busiest time of year for her exports, as retailers in the West prepare for the summer swimming pool season. But retailers have stopped placing orders. Some have even stopped wiring money for existing orders. |
| “The payments are difficult to collect,” she said. | “The payments are difficult to collect,” she said. |
| Businesspeople say the near-complete closure of China’s borders to limit a potential second wave of infections has hurt export orders. | Businesspeople say the near-complete closure of China’s borders to limit a potential second wave of infections has hurt export orders. |
| “A lot of clients wanted to come to China from Africa but can’t, because the flights are canceled,” said He Liehui, chief executive of Touchroad Group, a Shanghai trading and investment firm that buys minerals and timber from Africa and exports apparel and other manufactured goods there. | “A lot of clients wanted to come to China from Africa but can’t, because the flights are canceled,” said He Liehui, chief executive of Touchroad Group, a Shanghai trading and investment firm that buys minerals and timber from Africa and exports apparel and other manufactured goods there. |
| Updated July 7, 2020 | |
| The coronavirus can stay aloft for hours in tiny droplets in stagnant air, infecting people as they inhale, mounting scientific evidence suggests. This risk is highest in crowded indoor spaces with poor ventilation, and may help explain super-spreading events reported in meatpacking plants, churches and restaurants. It’s unclear how often the virus is spread via these tiny droplets, or aerosols, compared with larger droplets that are expelled when a sick person coughs or sneezes, or transmitted through contact with contaminated surfaces, said Linsey Marr, an aerosol expert at Virginia Tech. Aerosols are released even when a person without symptoms exhales, talks or sings, according to Dr. Marr and more than 200 other experts, who have outlined the evidence in an open letter to the World Health Organization. | |
| Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days. | Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days. |
| Scientists around the country have tried to identify everyday materials that do a good job of filtering microscopic particles. In recent tests, HEPA furnace filters scored high, as did vacuum cleaner bags, fabric similar to flannel pajamas and those of 600-count pillowcases. Other materials tested included layered coffee filters and scarves and bandannas. These scored lower, but still captured a small percentage of particles. | Scientists around the country have tried to identify everyday materials that do a good job of filtering microscopic particles. In recent tests, HEPA furnace filters scored high, as did vacuum cleaner bags, fabric similar to flannel pajamas and those of 600-count pillowcases. Other materials tested included layered coffee filters and scarves and bandannas. These scored lower, but still captured a small percentage of particles. |
| A commentary published this month on the website of the British Journal of Sports Medicine points out that covering your face during exercise “comes with issues of potential breathing restriction and discomfort” and requires “balancing benefits versus possible adverse events.” Masks do alter exercise, says Cedric X. Bryant, the president and chief science officer of the American Council on Exercise, a nonprofit organization that funds exercise research and certifies fitness professionals. “In my personal experience,” he says, “heart rates are higher at the same relative intensity when you wear a mask.” Some people also could experience lightheadedness during familiar workouts while masked, says Len Kravitz, a professor of exercise science at the University of New Mexico. | A commentary published this month on the website of the British Journal of Sports Medicine points out that covering your face during exercise “comes with issues of potential breathing restriction and discomfort” and requires “balancing benefits versus possible adverse events.” Masks do alter exercise, says Cedric X. Bryant, the president and chief science officer of the American Council on Exercise, a nonprofit organization that funds exercise research and certifies fitness professionals. “In my personal experience,” he says, “heart rates are higher at the same relative intensity when you wear a mask.” Some people also could experience lightheadedness during familiar workouts while masked, says Len Kravitz, a professor of exercise science at the University of New Mexico. |
| The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth. | The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth. |
| The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave. | The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave. |
| So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement. | So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement. |
| Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks. | Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks. |
| A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study. | A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study. |
| If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) | If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) |
| If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. | If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. |
| Mr. He said there had already been changes within both the domestic and overseas markets. Sales have fallen for more fashionable garments with higher price tags. But sales have actually increased for pajamas and other simple garments that people may want to wear indoors during lockdowns, he said. | Mr. He said there had already been changes within both the domestic and overseas markets. Sales have fallen for more fashionable garments with higher price tags. But sales have actually increased for pajamas and other simple garments that people may want to wear indoors during lockdowns, he said. |
| “For that, the companies need to make some adjustments” in what they manufacture, he said. | “For that, the companies need to make some adjustments” in what they manufacture, he said. |
| Beijing has closed the country’s borders so tightly that even foreign residents of China who have gone overseas are not allowed to return. That has slowed big construction projects and other investments that need technicians and other specialists who cannot re-enter the country, said Cheung Yup Fan, the chairman of the European Chamber of Commerce in the city of Tianjin. | Beijing has closed the country’s borders so tightly that even foreign residents of China who have gone overseas are not allowed to return. That has slowed big construction projects and other investments that need technicians and other specialists who cannot re-enter the country, said Cheung Yup Fan, the chairman of the European Chamber of Commerce in the city of Tianjin. |
| Another worry lies in how many small and medium-sized enterprises in China can survive the current difficulties. Even before the pandemic, many of those businesses had been struggling, as state-owned enterprises with better political connections increasingly monopolized the available loans from the state-controlled banking sector. | Another worry lies in how many small and medium-sized enterprises in China can survive the current difficulties. Even before the pandemic, many of those businesses had been struggling, as state-owned enterprises with better political connections increasingly monopolized the available loans from the state-controlled banking sector. |
| As a result, small businesses tend to borrow within informal networks. Now those networks are in trouble, said Sara Hsu, an economist at the State University of New York at New Paltz who specializes in small businesses in China. | As a result, small businesses tend to borrow within informal networks. Now those networks are in trouble, said Sara Hsu, an economist at the State University of New York at New Paltz who specializes in small businesses in China. |
| “A lot of small and medium enterprises borrow from friends and families, who also have small and medium enterprises,” she said. “There’s going to be a crunch for all of these borrowers.” | “A lot of small and medium enterprises borrow from friends and families, who also have small and medium enterprises,” she said. “There’s going to be a crunch for all of these borrowers.” |
| China’s output for the entire quarter was depressed by the broad suspension of economic activity from late January to late February. SpaceKnow, a commercial satellite imagery business, said northern China’s notorious air pollution almost completely vanished in February as businesses shut down and people stopped driving. | China’s output for the entire quarter was depressed by the broad suspension of economic activity from late January to late February. SpaceKnow, a commercial satellite imagery business, said northern China’s notorious air pollution almost completely vanished in February as businesses shut down and people stopped driving. |
| Even now, satellite imagery of nighttime lighting in China suggests that the country’s industrial base is running at half its usual level, according to SpaceKnow. | Even now, satellite imagery of nighttime lighting in China suggests that the country’s industrial base is running at half its usual level, according to SpaceKnow. |
| “China may have seen the Covid-19 outbreak first and local closures slowed the economy, but now China appears to be feeling the brunt of the slowing global economy,” said Jeremy Fand, the company’s chief executive. | “China may have seen the Covid-19 outbreak first and local closures slowed the economy, but now China appears to be feeling the brunt of the slowing global economy,” said Jeremy Fand, the company’s chief executive. |
| While Chinese factories have restarted, said Mr. He of Touchroad, finding markets for their goods may prove harder. | While Chinese factories have restarted, said Mr. He of Touchroad, finding markets for their goods may prove harder. |
| “One cause for optimism is that work resumption, and getting back into production, have been going well in China,” he said. But he added, “It’s going to be a big impact for the world economy, and some companies will not make it.” | “One cause for optimism is that work resumption, and getting back into production, have been going well in China,” he said. But he added, “It’s going to be a big impact for the world economy, and some companies will not make it.” |
| Yiwei Wang and Coral Yang contributed research. | Yiwei Wang and Coral Yang contributed research. |