COVID 19: China becomes first major economy to return to growth

By Bartholomew Madukwe

President of China, Xi Jinping, on Tuesday said his country has become the first major economy to return to growth since the COVID-19 pandemic.

He noted that China has taken the lead in the world in both epidemic control and economic recovery.

The devastating impact of the COVID-19 pandemic on the world economy hurt China’s economy significantly, through lower demand for Chinese products and by disrupting global supply chains, which China’s economy is deeply embedded in and heavily dependent upon. 

Chinese economy sufferend two blows from the COVID-19 pandemic.

The first blow was resulted from the domestic outbreak of the COVID-19 in the first quarter, affecting both demand and supply. 

On the demand side, strict control led to massive suspension of economic activities, such as catering, and entertainment industries. 

As a result, in the first two months of 2020, consumption and investment dropped by more than 20 percent, and exports fell by nearly 20 percent.

Commodity trade turned to a deficit of $7.09 billion from a surplus of $41.45 billion in the same period last year. 

On the supply side, most enterprises ceased production due to the COVID-19 outbreak, which coincided with the Chinese Spring Festival. 

Consequently, in the first two months, industrial added value fell by 13.5 percent, and the service production index fell by 13 percent.

The second blow came from the negative feedback of global economic shutdowns. The COVID-19 has spread rapidly around the globe and affected most of China's major trading partners. 

COVID 19 lockdown measures imposed by major economies inevitably caused the shutdown of global production chain and strike systematically on the global economy. 

Since the global economy declined, external demand shrinkend sharply and hit China's exports.