HH China’s ‘Two Sessions’ Herald Rebound Of Economy

As the coronavirus fallout is spreading in Western economies, China’s rebound has begun. Global recovery requires global cooperation, however.   

Today, international interest in the annual Two Sessions of China’s top legislative and political advisory bodies - National People’s Congress, and Chinese People’s Political Consultative Conference – which starts on Thursday, is exceptionally high.

Due to the global pandemic, the Sessions take place under strong anti-epidemic measures, including social distancing, and will be significantly shorter and rely more on videoconferences. Such measures are in line with the science-based health policies, which the central government adopted in late January.

Apart from their sociopolitical significance, the Two Sessions herald the rebounding of the Chinese economy, even amid the global pandemic.

From virus containment to economic rebound                 

In China, big business has operated with near full capacity since mid-April. Factories and energy plants are humming. Stores are reopening.

Of course, there’s no immediate return to the pre-virus world. Yet China’s new normal differs dramatically from that in the US and Euro area, thanks to proactive governance and science-based policies to contain the virus outbreak.

In China, the rebound of the economy began in March-April. In the US and Europe, it could ensure more broadly only after the 2nd quarter. But even those hopes could be undermined by premature exits from the lockdown, new virus waves, and residual clusters.

In the 1st quarter, China’s growth shrank 6.8 percent. However, the rebound could raise the 2nd quarter data close to 4 percent, while the 3rd and 4th quarter could prove close to 5 and 6 percent, respectively. That would leave the 2020 result at 2 percent, as the IMF has predicted.

Assuming peaceful international conditions, faster rebound could improve the outcome, however. Despite the dire international horizon, China’s economy has potential for an upside surprise.

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Disclaimer: Dr. Dan Steinbock is an internationally recognized strategist of the multipolar world and the founder of Difference Group. He has served at the India, China and America Institute ...

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