Coronavirus: Chinese economic recovery uncertain
Chinese experts: GDP will grow over 5.5% this year. Consumption, however, is likely to remain low in the coming months. The recovery of production threatened by problems in freight transport. The spread of the outbreak abroad threatens Chinese companies.
Beijing (AsiaNews) - With the decline in coronavirus cases, Chinese experts say they are confident that the country will recover rather quickly from the fallout caused by the ongoing epidemic crisis, but the national economic framework remains uncertain.
The China Center for International Economic Exchanges (Cciee) claims that the Chinese economy will have a positive rebound as early as March, with a good chance of reaching more than 5.5% growth at the end of the year. International analysts' estimates are lower, and predict an increase in gross domestic product between 4% and 5% - official data reveal that in 2019 it was 6.1%.
For the CCIEE, the increase in consumption and imports in the coming months will encourage recovery. But according to a investigation by Rong360.com, a financial information company based in Beijing, a third of respondents said that it will not increase consumption when the epidemic crisis is over. On the other hand, two thirds expect to keep spending even in the long run.
In 2019, consumption represented around 58% of China's gross domestic product. President Xi Jinping has made increasing domestic demand a primary objective of his economic plan, so as to reduce the country's dependence on exports.
To facilitate rapid economic recovery, the production system must return to its full potential. However, companies are struggling to bring workers back to factories and the entire logistics in the country are far from fully operational. As highlighted by the European Union Chamber of Commerce in China, freight transport is severely limited by restrictions imposed by the authorities, which also change from province to province. For Jörg Wuttke, president of the Chamber, one of the government's priorities to stimulate the full restoration of production activities should be to launch common rules that apply throughout the national territory.
The spread of Covid-19 in the rest of the world then risks frustrating the possible internal recovery in China. Many of the countries affected by the epidemic have reduced commercial traffic with China, and large Chinese state-owned enterprises are highly exposed abroad. According to the China Global Investment Tracker, Beijing companies invested 113 billion euros across the globe in 2019.