China’s economy plunges 6.8 per cent in first quarter
China’s economy showed a historic decline of 6.8 per cent in the first quarter of the year amid widespread closures caused by the coronavirus outbreak, according to official data.
The economy reeled from factory and business closures as the government tried to contain the spread of the new coronavirus, which has so far killed more than 3,300 people and infected more than 82,300 across China.
This was the country’s first economic contraction since it began publishing quarterly data, in 1992.
The last time China recorded a full year of economic decline was in 1976, at the end of the Cultural Revolution, according to the World Bank.
Industrial output, which includes manufacturing, mining and utilities activity, fell 8.4 per cent in the first three months of the year, the National Bureau of Statistics said Friday.
Retail sales plunged 19 per cent in the same period.
The government took the first measures to shut down transportation links in late January, as the virus, which originated in the central city of Wuhan, was spreading across the country and abroad.
Authorities later put entire cities under quarantine in Hubei province, home to Wuhan, and elsewhere in the country.
In recent weeks, China has all but claimed victory over the virus. Authorities reported no new locally transmitted infections for several days starting in late March, as the focus shifted to preventing new infections coming from abroad.
The government now says most factories have resumed operations, while schools are gradually reopening in several provinces.
China’s priorities going forward will be to continue to control the epidemic, boost domestic demand and bolster its supply chains, said Huang Weiping, a professor of economics at Renmin University of China.
“The true negative impact of the virus on the international market will appear in the second quarter, and that’s when the impact on our country will begin to show,” he said.
A recovery in domestic demand may help boost China’s economic growth in the second quarter of the year and help offset the impact of shrinking demand in consumer markets such as Europe and the United States.
China’s exports dropped 6.6 per cent in March compared with the same period last year, according to data released Tuesday, while imports fell 0.9 per cent. However, the data improved over the combined first two months of the year, when exports had fallen 17.2 per cent and imports had plunged 4 per cent.
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“I believe the world economy will experience negative growth this year, but it depends on whether we will cooperate,” Huang said. “For example, if China and the US join forces, the economy will be in recession. If China and the US have a confrontation, it will lead to an economic depression.”
Beijing is set to announce an economic growth target for 2020 during its annual parliamentary session, which has been postponed from March and could take place in the following months. (dpa)
