The Asian giant's GDP may plummet by 6% in the first quarter, the first recession since the Cultural Revolution. Knock on effects throughout Asia. The stock markets recover thanks to the stimuli promised by the big economies.
Beijing (AsiaNews / Agencies) - Chinese industrial production has fallen to historic lows due to the Wuhan coronavirus (Covid-19). The Caixin / Markit manufacturing index has experienced the fastest contraction rate since it was launched in 2004. The figure, which refers to small and medium-sized enterprises, plummeted to 40.3 in February (an index below 50 means that the economy is shrinking). Last month it had been calculated at 51.1 points.
The official production index, published on February 29 by the National Statistical Office, marks a much greater contraction, at 35.7 points.
Analysts fear that the Chinese economy may experience heavy negative growth in the first quarter of 2020 (-6% compared to the previous quarter and -3% compared to the same period of the previous year). Prior to the release of the latest figures, the forecasts were for a slowdown and not an economic contraction in China.
It would be the first time since the Cultural Revolution, between the late 1960s and early 1970s, that Beijing is facing a recession. The blow will now have inevitable repercussions on neighboring countries, closely linked to Chinese manufacturing production.
Nonetheless, the markets appear to have confidence in the stimulus measures adopted or promised by Beijing and other large economies, especially the United States and Japan. After the crash, last week (the worst since the 2008 mortgage crisis), the main Asian stock exchanges turned positive. In the mid-morning Shanghai marks a + 3.15%, Shenzhen + 3.77% and Hong Kong + 0.72%. Tokyo is approaching closure with a + 0.95%.