Insights | China down but far from out as recovery revs up
It’s easy to forget it was only a couple of months ago that COVID-19 was widely considered likely to be a localised epidemic in China.
Of course, the virus swiftly became anything but, having now spread to more than 180 countries/regions, infecting more than 2.7 million people and sadly claiming around 190,000 lives.
Thankfully, positive signs are emerging in various countries. That’s particularly true for Australia as government-enforced restrictions across the economy – and some good luck – “flattens the curve”, some states even registering zero new cases on a daily basis in recent weeks.
While not all countries are experiencing the same outcomes, China, the original epicentre of the virus, remains very much in the spotlight from both an economic and health outcome perspective, given it is the world’s second largest economy and has been dealing with the impacts the longest. The economic consequences of the authorities’ complete lockdown of Wuhan and the Hubei province in January and February, as well as stringent restrictions on travel and trade elsewhere, have been severe, with annual GDP slumping from 6 per cent growth at December to a 6.8 per cent decline at March.
That’s not only a large adjustment but an historic one, marking the first contraction since 1976.
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However, having seemingly brought COVID-19 under control and with precautions against the importation of a second wave now in place, China’s economy is poised to recover through the rest of 2020 and into 2021, boding well for Australia, with China our largest trading partner.
Read the full article by Elliot Clarke, Director and Senior Economist at Westpac here.
