The Coronavirus Epdemic Has Been Controlled in China but There Are Challenges in the Economic Recovery

From an New York Times article, China’s factories had back on after the control of the epidemic domestically. But the factories are facing a problem of finding buyers since the problem that the recovery of the production side may be slightly faster than the consumption side. The difficulties are warning China and possibly other countries that we may be a “W-shaped” pattern of economic activity.

Consumers may be afraid of further spread of virus and they have less willingness for consumption.

Senior officials suggest China to use fiscal policy to deal with the problem. The article predicts that Chinese government will implement an expansionary budget that creates a larger deficit and approves further issue of bonds.

The huge fall in the price of oil will also stimulate the progress of China’s economy as it is the world’s largest oil importer. The industrial production in China recovered strongly but there was still a fall in the retail side compared to the figure last year. Expert explained it with the unemployment of migrant workers and pay cuts among white-collar workers.

Link to the New York Times article : https://www.nytimes.com/2020/05/15/business/china-economy-coronavirus.html

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s