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China’s economy bounces back more quickly than expected from coronavirus China’s economy bounces back more quickly than expected from coronavirus
(30 minutes later)
BEIJING — China’s economy defied predictions and bounced back to growth levels recorded before the coronavirus pandemic erupted, according to official figures released on Thursday. BEIJING — China’s economy has recovered rapidly from its coronavirus shutdowns and has started to grow again, leading analysts here to crow that the country was “best-in-class” among the world’s major economies at dealing with the pandemic.
But independent analysts warned that the statistics, which are often thought to be massaged for political reasons, showed that China still faces challenges in reviving its domestic economy and in its coronavirus-stricken export markets. This was clearly a dig at the United States — where the virus continues to spread aggressively and the economy is suffering as a result — though Chinese statistics are often thought to be massaged for political reasons.
Indeed, Chinese leader Xi Jinping said in a letter released Thursday that China was dealing with the epidemic and making progress on his top two economic goals. China is “striving for a decisive victory in building a moderately prosperous society in all respects and eradicating poverty,” Xi wrote, according to the state-run Xinhua News Agency.
While China still faces challenges in reviving its domestic economy and in its coronavirus-stricken export markets, Thursday’s data appeared to show a speedy improvement from the depths of February.
The world’s second-largest economy contracted by 6.8 percent in the first three months of the year, the worst quarterly figure since 1992, as the coronavirus that began in Wuhan emanated out across the country, bringing industry to a halt and forcing tens of millions of people to remain indoors.
Economists had anticipated a rebound in the second quarter, but most thought the growth rate would come in at about 2.4 percent. China’s National Bureau of Statistics defied these forecasts, announcing that growth had hit 3.2 percent between April and June.
“China’s V-shaped economic recovery continued for a fourth consecutive month in June, led by strong domestic demand,” said Andy Rothman, an American economist known for his bullish views on China. “If covid-19 remains under control, China can remain the world’s best consumer story.”“China’s V-shaped economic recovery continued for a fourth consecutive month in June, led by strong domestic demand,” said Andy Rothman, an American economist known for his bullish views on China. “If covid-19 remains under control, China can remain the world’s best consumer story.”
As if to underscore this, the state-run China Film Administration announced Thursday that almost all movie theaters across the country would be able to open on Monday, after an almost six-month closure. Growth of 3.2 percent is a far cry from the 6.1 percent annual rate recorded last year — a rate of 6 percent is believed to be the dividing line between politically tolerable and intolerable — but is still a sharp improvement on the first quarter.
Life in most parts of China has regained a semblance of normality, although temperature checks are required before entering most buildings and people are wearing masks almost universally. Many stores and services require proof of a clean bill of health — as evidenced through a smartphone app — before they will allow customers to enter. Life in most parts of China has since regained a semblance of normality, although temperature checks are required before entering most buildings and people are wearing masks almost universally. Many stores and services require proof of a clean bill of health — as evidenced through a smartphone app — before they will allow customers to enter.
Thursday’s data appeared to show the fruits of this rapid recovery from the depths of February. As if to underscore this, the state-run China Film Administration announced Thursday that almost all movie theaters would be able to open on Monday, after an almost six-month closure.
Already growing at the slowest pace in three decades, the world’s second-largest economy contracted by 6.8 percent in the first three months of the year, the worst quarterly figure since 1992, as the coronavirus that began in Wuhan emanated out across the country, bringing industry to a sudden halt and forcing tens of millions of people to remain indoors.
Economists had anticipated a rebound in the second quarter, but most thought the growth rate would come in at about 2.4 percent.
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China’s National Bureau of Statistics defied these forecasts, announcing Thursday that growth had hit 3.2 percent between April and June. But it warned that the outlook for China, which depends on trade with economies now heading into recession, is far from rosy. The National Bureau of Statistics warned that the outlook for China, which depends on trade with economies still battling the virus or entering recession, is far from rosy.
“At the moment, the global epidemic is still spreading, the great impact of the epidemic on world economy will continue to evolve, external risks and challenges have increased significantly, domestic economic recovery remains under pressure,” Liu Aihua, a bureau spokeswoman, told reporters. “At the moment, the global epidemic is still spreading, the great impact of the epidemic on the world economy will continue to evolve, external risks and challenges have increased significantly, domestic economic recovery remains under pressure,” Liu Aihua, a bureau spokeswoman, told reporters.
Still, Julian Evans-Pritchard, senior China economist at Capital Economics, saw reason for optimism, saying that with jobs and spending returning, and the government trying to stimulate growth, the outlook was good. The International Monetary Fund projects that the world economy will contract by 4.9 percent this year.
Furthermore, swaths of China have been inundated this month in the worst floods in two decades, with state media saying that about 29,000 homes have been destroyed and at least 141 people have died. The economic losses have topped $12 billion, and more rains are expected.
Still, Julian Evans-Pritchard, senior China economist at Capital Economics, saw reason for optimism in China’s statistics, saying that with jobs and spending returning, and the government trying to stimulate growth, the outlook was good.
“The recovery will inevitably slow down during the second half of the year now that the initial boost from reopening has passed,” he said in a note to clients. “But … we think GDP will return to its pre-virus trend by the end of the year, faster than in any other major economy.”“The recovery will inevitably slow down during the second half of the year now that the initial boost from reopening has passed,” he said in a note to clients. “But … we think GDP will return to its pre-virus trend by the end of the year, faster than in any other major economy.”
China’s film industry has been particularly hard-hit by the coronavirus-related restrictions. China’s property market has shown surprising resilience, economists said, and exports have picked up as factories resume production. Industry and construction indicators in the second quarter rose to levels higher than before the coronavirus outbreak, according to the official statistics. But in the service sector, which comprises about 60 percent of China’s economy, output remains just below pre-virus levels.
Many production companies release their potential blockbusters at the start of the Lunar New Year holiday, when most people are off work for a week and the weather is cold. But this year, the coronavirus outbreak coincided exactly with the holiday, which began on Jan. 24, forcing 70,000 screens to go dark at what should have been the biggest box-office week of the year. Economists were buoyed by the labor market data in particular. The surveyed unemployment rate ticked down to 5.7 percent and is now only a sliver higher than at the end of last year.
A few hundred were allowed briefly to reopen, but since then, even as the rest of the economy has opened up, theaters have remained shuttered. Wanda Film, China’s largest movie theater chain, this week said it expected to have lost about $220 million in the first half. “More importantly, migrant workers, who are not properly captured in the surveyed rate yet make up a third of the urban workforce, have mostly resumed employment,” Evans-Pritchard said.
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While the China Film Administration said Thursday that movie theaters would be allowed to reopen on July 20, strict social distancing rules would strip the moviegoing experience of many of its pleasures. The China Film Administration said Thursday that movie theaters would be allowed to reopen on July 20, strict social distancing rules would strip the moviegoing experience of many of its pleasures.
Temperatures will be checked and people with fevers will not be allowed in. Those admitted will have to wear masks and sit at least three feet apart from each other, with theaters below 30 percent capacity. The concession stands will be closed and no eating or drinking will be allowed, the authority said. China’s film industry has been particularly hard-hit by the coronavirus restrictions.
Many production companies release their potential blockbusters at the start of the Lunar New Year holiday, when most people are off work and the weather is cold. But this year, the coronavirus outbreak coincided with the holiday, which began on Jan. 24, forcing 70,000 screens to go dark at what should have been the biggest box-office week of the year.
A few hundred theaters were allowed briefly to reopen, but since then, even as the rest of the economy has opened up, most have remained shuttered. Wanda Film, China’s largest movie theater chain, this week said it expected to have lost about $220 million in the first half.
From Monday, temperatures will be checked and people with fevers will not be allowed in. Those admitted will have to wear masks and sit at least three feet apart, with theaters below 30 percent capacity. The concession stands will be closed and no eating or drinking will be allowed, the authority said.
Only a handful of movie theaters — those in the Fengtai district in Beijing, near the market that was the scene of a recent outbreak — would remain closed.Only a handful of movie theaters — those in the Fengtai district in Beijing, near the market that was the scene of a recent outbreak — would remain closed.
China’s property market has shown surprising resilience, economists said, and exports have picked up again as factories resume production. Industry and construction indicators in the second quarter rose to levels higher than before the coronavirus outbreak, according to the official statistics. But in the service sector, which comprises about 60 percent of China’s economy, output remains just below pre-virus levels.
Economists were buoyed by the labor market data in particular. The surveyed unemployment rate ticked down to 5.7 percent and is now only a sliver higher than at the end of last year.
“More importantly, migrant workers, who are not properly captured in the surveyed rate yet make up a third of the urban workforce, have mostly resumed employment,” Evans-Pritchard noted.
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