How bad are China's economic woes?

  • 2020-05-22 06:29:21
While economists say China's economic data can't always be trusted, they now have a new dilemma - there is no data. On Friday, China said it wouldn't be setting a target for economic growth for this year. That's unprecedented - the Chinese government hasn't done this since it began publishing such goals in 1990. Abandoning the growth target is an acknowledgement of just how difficult a recovery in China will be in a post pandemic era. And while recent figures have shown that China is on the way out of its slowdown: it's an uneven recovery. First, the good news. For the first time since the pandemic hit China - factories are making goods again. Industrial output in April grew by a better-than-expected 3.9% - a marked difference from the collapse of 13.5% in the first two months of this year as massive lockdowns were imposed. There's also a swathe of other data that has been surprisingly strong - pointing to what economists like to call a V-shaped recovery - a sharp, drastic initial fall - followed by a quick rebound in economic activity. Coal consumption by six major power generators surged back to historical norms after May's "Golden week" holidays, according to investment bank JP Morgan. It currently stands 1.5% above the historical average, suggesting that power demand has returned to normal. And the pollution-free Chinese skies that we saw in the aftermath of the lockdowns there - well, they've disappeared as economic activity has picked up. China's air pollution levels recently surpassed concentrations over the same period last year for the first time since the coronavirus crisis began, driven by industrial emissions. All of this shows that China is slowly getting back to business. But it's not business as usual, and this shows just how difficult it will be for the rest of us to get our economies going again.  

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