Paradoxically, the coronavirus recession, instead of stopping China’s progression, could accelerate it.
Undoubtedly the draconian quarantine in Hubei and the national anti-contagion measures have stunned the economy.
Its GDP in the first quarter of 2020 has collapsed by 6.8% on an annual basis, and all the monthly data for February have collapsed.
However, the picture has changed since March, with growth forecasts for 2020 revised upwards from 1% to over 2%.
In contrast, in the other large economies, expectations point to a drop in GDP of between 5% and 12%. The indices of the purchasing managers (SMEs) of industrial and service companies for three months confirm a significant recovery in activities and demand. In fact, industrial production rose by 4.4% in May, after 3.9% in April and is expected to expand.
Recovery certainly due to some economic investment stimuli given by the country itself.
In the coming years, instead of concentrating investments in physical infrastructure, it will develop the sectors of the future such as self-driving vehicles, artificial intelligence, telemedicine or 5G networks. By accumulating the growth differentials estimated by the IMF for 2020 and 2021, China will inflict a detachment of about 12.5 percentage points of growth on the United States and a 14 on the euro area.
Furthermore, the Chinese locomotive will drag across Asia.
Asean-5 countries (Indonesia, Malaysia, Philippines, Singapore and Thailand) in 2020-21 will grow by more than 4% while the GDP of advanced countries will still be 3.6 percentage points lower than that of 2019.
Even India in this two-year period will exhibit a positive growth rate, albeit slightly above 1 percent.
After the pandemic is over, the developed countries will find themselves struggling, while the center of gravity of the world economy will have moved overwhelmingly, inexorably towards Asia.
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