The Chinese economy experienced its first contraction in about three decades in the first quarter.
The world ’s second-largest economy fell into three months of the first year, factories closed, consumers were forced to stay at home, and the virus spread to other countries.
Analysts from 14 institutions predict that the Chinese economy will decline by 8.2% year-on-year in the first quarter, which is the first contraction. Since the beginning of quarterly data reporting in the early 1990s.
They also predicted that the annual gross domestic product (GDP) growth rate will be 1.7%, a significant decline from the 6.1% growth recorded last year, and much lower than
If the forecast is correct, it will The worst annual growth since the death of Communist Party Chairman Mao Zedong in 1976.
Last Tuesday, the French National Monetary Fund (Onal Monetary Fund) gave a more terrible estimate that it will grow by 1.2% in 2020.
Although many Chinese companies have resumed operations, the coronavirus pandemic has succumbed to other economies around the world and many major trading partners have been blocked
The IMF said that this year ’s pandemic will reduce world production by 3%.
Economists have different impacts of coronavirus on China's economy. The contraction rate in the first quarter is estimated to be between 4.6% and 15%.
Xu Xiaochun, an economist at Moody & # 39; s Analytics, said that China ’s downturn was “disappointing than anyone expected”.
He also pointed out that China's labor force is returning to work slower than expected, which indicates a significant contraction in the first quarter.
Supply will not be a problem in April and is expected to provide more financial and monetary support to the economy, he added.
A slow return to work also heralded a bad job. The unemployment rate has risen since December last year.
An economist at ANZ Research pointed out in a recent report. The report pointed out that there was a double-digit contraction in economic indicators in the first two months, but there was no strong rebound in March.
Labor mobility has not returned to the level before the virus outbreak, especially in major production bases.
They added: “Although the central government has been trying to encourage workers to return to the city of work, such as relaxing travel restrictions,”.
Although China ’s virus situation has greatly improved, Zhu Haibin, chief economist of JP Morgan China, said: “External risks may inhibit the expected recovery of China ’s export-related manufacturing activities in the second quarter.”
Other countries The blockade may disrupt global supply. Zhu added that despite fears that import cases may lead to a slower return to normal life, delaying China's service consumption and the recovery of domestic demand.
Raphie Hayat, a senior economist at Rabobank, added that COVID-19 is expected to be “larger than the 2008/2009 major financial crisis”, with the consequence of damaging China ’s economy increase.
Qu Hongbin, chief Chinese economist at HSBC, warned that the impact on external demand should not be viewed as merely a trade contraction.
"Last year, Sino-US trade tensions showed us that the shock of external demand will quickly lead to a substantial deterioration in domestic demand growth," he said.
The blow to the supply chain “is getting deeper. He added.”
“As we now predict that almost all Asian countries’ economies will contract or be very weak this year, the impact of this year ’s headwinds on China may be Deeper and more extensive.