The Beijing National Statistical Office released (on July 16, 2020) the estimates on the first half of the year, according to which the economy of mainland China grew in the second quarter at a rate of 3.2% compared to the same period of the previous year, and by 11.5% compared to the first quarter of 2020. On a half-yearly basis, the gross domestic product instead contracted by -1.6%.
The recovery, which follows the drastic contraction of -6.8% recorded in the first quarter, is higher than expected, achieved thanks to fiscal and social policies in support of economic activities. New incentives have enabled companies to reduce operating costs, obtain liquidity and promote employment, whose stability has always been one of the key issues for the Chinese government.
After a growth of 6.1% in 2019, Beijing reacted with restrictive measures that strongly influenced the performance of the first quarter. The lockdown postponed the National People’s Assembly, for the first time without confirmation on the growth target, one of the most anticipated data from global markets.
The estimates of the International Monetary Fund (IMF), published in the World Economic Outlook of June, forecast a growth of 1% for the Chinese economy in the year 2020, followed by a strong rebound in 2021, a year in which growth expectation is 8.2%. The IMF’s estimate for Beijing’s performance is the best of any region in the world. The outlook of the IMF confirms a contraction of the global economy in 2020 equal to 4.9%, with advanced countries suffering the greatest impact (-8% for the United States, -10.2% for the Euro area, – 12.8% for Italy and -5.8% for Japan).
The second quarter therefore relaunches development, based on data from the National Bureau of Statistics of China supported by improvement forecasts also for the area of neighboring countries, with the ASEAN association (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam) which drops -2% in 2020 to grow by 6.2% in 2021.
China remains closed, but it seems to accurately calculate its restart with respect to Washington, Brussels and the rest of the world.