The coronavirus pandemic has brought China’s extraordinary run of economic growth to an end — a stark reminder of the enormous task ahead for world leaders trying to restart the global economy.
China’s National Bureau of Statistics announced on Friday morning in Beijing that the country’s economic output plunged 6.8% in the three months to March compared to the first quarter of 2019 and a 6.1% growth rate for all of last year.
On a quarter on quarter basis, GDP slumped by even more – a huge 9.8% from the 4th quarter of 2019 when growth was reported as 6.0%.
It was the first decline in growth since records started in China in 1992 and unofficially is the first since the days of the Cultural revolution in 1976 when the economy contracted sharply (according to unofficial measurements).
The plunge ended more than 40 years of continuous growth which saw the Chinese economy end up as the second largest in the world eclipsing along the way giants like Germany, the UK, and Japan.
The slump reflected China’s dramatic efforts to stamp out the coronavirus, which included shutting down most factories and offices in January and February – the effects are still rattling their way through the economy.
The coronavirus’s spread to the United States and Europe, saw their economies freeze and froze the economies there, has led to forecasts that the world’s output could shrink far more this year than it did even during the financial crisis.
Other data confirmed the massive slide in the quarter.
Industrial production in March dropped 1.1% compared with a year earlier, after a 13.5% decline in the January-February period, the National Bureau of Statistics said Friday.
Fixed-asset investment in the first quarter slumped 16.1%, compared with a 24.5% fall recorded in the January-February period.
China’s retail sales in March dropped 15.8% from a year earlier, after a 20.5% decline in the first two months of the year.
That was much greater than forecasts fora fall of 8.0% and like the US where retail sales fell a record 8.7% in March, tells us that Chinese consumers have been flattened by the closures.
