12 2GM Tuesday October 20 2020 | the times
News
China’s economy has emerged from the
coronavirus pandemic in rude health,
recording growth in a year that has
crippled most of the rest of the world.
As fears mount that Europe’s biggest
economies could buckle under the con-
tinuing pressure from Covid-19, in the
birthplace of the virus an economic
contraction early in the year has given
way to growth of 4.9 per cent since July.
Economists expect China to be the only
G20 nation to expand this year.
“It’s a double embarrassment for the
West,” Charles Robertson, the global
chief economist at Renaissance Capital,
said. “There was a western arrogance of
not believing that the virus would hit
the West in the way it hit China. We
[thought] our hospitals were better
than Wuhan’s so would cope better. We
refused to lock down even though
China had shown that it worked. We
never got it under control.
“China has closed the gap in one big
bound in 2020 with rising GDP. They
[the Chinese] look better in terms of
virus management and better in
economic management.”
Analysts say that China will enter the
new year with a stronger economy than
when it recorded the first cases of coro-
navirus in Wuhan last December.
While European nations and the
United States face a disastrous winter
with possible further lockdowns, China
is recording only a dozen or so new
Covid-19 cases a day out of a population
of 1.2 billion.
“The West has been discredited,” Mr
Robertson said. “The overconfidence of
the West has been punctured. [Its] sta-
tus has declined, while China’s reputa-
tion has improved.”
The International Monetary Fund
forecasts that China will grow 1.9 per
cent this year; compared with drops of
4.3 per cent in America, 5.3 per cent in
Japan, and 9.8 per cent in the UK.
Analysts highlight the continued
momentum of China’s manufacturing
sector, with industrial output growing
for six consecutive months after Presi-
dent Xi ordered factories to reopen in
March.
The Chinese government moved to
shore up its wounded economy after its
worst quarterly drop, at least since
records began in 1992, during the first
three months of the year. GDP
collapsed by 6.8 per cent after manufac-
turing output, investment levels and
retail sales slumped. Officials increased
fiscal expenditure, offered tax relief and
cut lending rates to stimulate growth
and support jobs.
Simon French, the chief economist at
Panmure Gordon and a former White-
hall official, said: “China is the only
major economy likely to have a
V-shaped recovery this year. Its eco-
nomic output is actually up, year to
date; it’s extraordinary. There will beThe outdoor market in the Sanlitun
shopping district of Beijing was packed
with shoppers, while onlookers took
photos of a giant toy cat, brought to the
square as a marketing gimmick for a
Chinese taxi company.
Most kept their masks on and as
much distance as they could but there
are few other signs that eight months
ago China was the birthplace and
centre of the coronavirus outbreak. The
number of shoppers has returned to
pre-pandemic days and trendy restau-
rants, shops and bars have opened to
tap into the new sense of wellbeing.
During China’s Golden Week holi-
day, from October 1 to October 7,
637 million people travelled across the
country without any big rise in cases.
Gyms, cinemas and entertainment ve-
nues have been open since August. Life
is almost back to normal.
Chinese consumers are regaining
confidence and spending more money.
Retail sales grew by 3.3 per cent last
month from only 0.5 per cent in August,
according to the National Bureau of
Statistics. China declared victory in
‘In a storm you need strong leadership’
Wendy Tang Beijing containing the virus last month at a
pomp-filled ceremony in the capital’s
Great Hall of the People. President Xi
handed medals to citizens deemed to
have played instrumental roles in
China’s fight against the virus, which
was first identified in Wuhan last De-
cember. None of the participants wore
masks and the president shook hands
with several people.
While the western world slipped into
a second wave, President Xi attributed
China’s relative success to the merits of
one-party rule. “The strong leadership
is the most reliable backbone when a
storm hits,” he said. “The pandemic
once again proves the superiority of the
socialist system with Chinese charac-
teristics.”
The country imposed a rigidly en-
forced strict lockdown in the early days.
Residents of Wuhan spent 76 days
mostly in confinement and quaran-
tined from the rest of China.
International travel was restricted in
March. Only Chinese citizens and a
handful of diplomats and essential
business travellers were allowed to en-
ter the country. All were required to
undergo quarantine on arrival.
China tentatively reopened its bor-
ders in July. Its aviation authority said
anyone entering from abroad must be
able to show a negative Covid-19 test
taken within five days of boarding the
plane.
The country has implemented mass
testing schemes. Earlier this month 12
domestically transmitted cases were
discovered and linked to a hospital in
the eastern city of Qingdao. The
authorities said they tested all nine mil-
lion residents within five days.
China has at least four coronavirus
vaccine candidates in the final stage of
clinical human trials. The country
joined an international initiative last
month to distribute Covid-19 vaccines
to countries worldwide.
The eastern province of Zhejiang has
approved the “emergency use” of one of
the vaccines for autumn and winter and
has been injecting people since June.
As of last month, more than 350,
people, including medical workers, dis-
ease control and prevention staff, cus-
toms and border control officers, had
been given the injections and none suf-
fered severe side-effects, according to
Chinese media outlets.China’s recovery is a
wake-up call for the
West, say economists
Callum Jones Trade Correspondent
Gurpreet Narwan
Economics Correspondent
eyebrows raised in diplomatic circles
and, indeed, in economic circles, that
the source of the pandemic appears to
be the biggest economic beneficiary.”
Yi Gang, governor of the Chinese
central bank, suggested that officials
now predicted its economy would
expand by about 2 per cent this year.
“The Chinese economy remains resil-
ient,” he said. “Continued recovery is
anticipated, which will benefit the
global recovery.”
Even if it lives up to such expecta-
tions, this year’s annual growth would
still be China’s slowest since 1976, the
final year of Mao Zedong’s cultural
revolution.
Iris Pang, the chief economist for
Greater China at ING, said the “big
jump” in retail signalled that consumer
demand had “further stabilised” with
evidence of greater corporate spending,
too. With international tourism yet to
recover, she described how domestic
travellers had “helped the economy a
lot” by spending money on activities
which typically appealed to foreign
visitors and buying luxury items in
duty-free shops. “These activities have
created jobs for low-skilled labour and
have helped to further stabilise
consumption.”
Yoshikiyo Shimamine, the chief
economist at Dai-ichi Life Research
Institute, said that China’s recuperation
has been driven by a rebound in exports.
“Consumer spending is also headed in
the right direction, but we cannot say it
has completely shaken off the drag
caused by the coronavirus,” he told
Reuters. “There is a risk that the return
of lockdowns in Europe and another
wave of infections in the United States
will hurt consumer spending and trig-
ger more job losses, which would be a
negative for China’s economy.”
China is fast closing the gap on
America, leading article, page 31
Beijing needs the world to follow, page 40IMF growth forecasts 2020
US
China
JapanGermanyUKCanadaFranceItaly
-4.3%
-5.3%
-6%-9.8% -9.8%
-10.6%-7.1 %
1.9%
Hospital staff in Milan who treated
Covid-19 patients in spring then cele-
brated as the number dropped over the
summer are struggling again as all 100
beds for people with the virus fill up.
“One nurse came up to talk to me
about it and burst into tears,” said Mas-
simo Galli, head of the infectious dis-
eases unit at Sacco hospital.
Milan is at the centre of a surge in
infections as daily cases top 10,
nationally, higher than in March when
Italy became the first European coun-
try to be hit hard by coronavirus. So far
36,000 people have died.
Then Italians inspired the world by
wearing masks and enduring a tough
lockdown, raising the question of how
Italy succumbed to the second wave.
“It looks like we stopped paying
attention to the virus over the holidays
and finally we are seeing the conse-
quences,” Professor Galli said.
Desperate to ward off another lock-
down, Giuseppe Conte, the prime min-
ister, gave mayors permission to shut
down piazzas at 9pm if they filled with
revellers after he made masks compul-sory outside. Italy has had 147 new
cases per 100,000 residents over the
past 14 days compared with 329 in the
UK and 414 in France, but it is manag-
ing only half the 300,000 daily swabs
taken in the UK, suggesting its real case
load is higher.
“We are just days behind the rest of
Europe,” Professor Galli said.
With more than 1,400 new cases on
Sunday, the new epicentre is greater
Milan, where the spread has been
linked to commuters. “Public transportNews Coronavirus Wo r l d
Mayors across Italy will get powers to close public areas after 9pm and the
Hospitals fill up as Italy
Tom Kington Rome
FAMJJASOM
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Source: WHOCovid-19 daily cases in Italy
000s