Economic Response -china
COVID-19 Economic Response: China
The coronavirus started in Wuhan in the Hubei Province of China and the entire province was put into a complete lockdown as the spread of the virus was detected. The nature of the Chinese government makes it difficult to assess the economic response to the crisis and much of the attention on China has been around its lack of transparency. Many question if the number of cases and number of deaths is accurate and criticise the delay in alerting the world of the seriousness of the crisis. Fuelling the criticism is the quick reopening of the wet markets where the source of the coronavirus is believed to have started.
While not much is known of China’s economic response to the crisis by way of support for its citizens and businesses, as economic figures are released, it is a lot clearer to see how the economy has been affected.
As a major manufacturer and exporter, it is certain that many of China’s businesses will have been seriously affected as their international customers have closed their businesses and are not purchasing.
In the first quarter 2020, China’s growth figures on seasonally adjusted figures contracted by 9.8%. The first negative growth figures for many years and clearly a result of the coronavirus crisis.
China will likely face further impacts as many of their trading partners identified serious flaws in supply lines during the own crisis experience and are working to address those issues around sovereignty. Australia in particular is looking to ramp up the manufacturing sector to be less reliant on Chinese imports especially for essential goods such as masks and PPE.
As other countries follow suit, China is likely to see further impacts and declines in manufacturing.
With Australia leading the call for an international enquiry into the COVID-19 pandemic, it is likely that a lot of economic diplomacy will be required to restore China’s economic position.