China’s economy contracted for the first time in decades as the coronavirus outbreak ravaged the country and economic activity ground to a halt. Gross domestic product was down 6.8 percent from the same time during the previous year, according to data released Friday by China’s National Bureau of Statistics. The contraction was slightly more exaggerated than …
China’s economy contracted for the first time in decades as the coronavirus outbreak ravaged the country and economic activity ground to a halt.
Gross domestic product was down 6.8 percent from the same time during the previous year, according to data released Friday by China’s National Bureau of Statistics. The contraction was slightly more exaggerated than the 6.5 percent decline forecasted by economists.
The world’s second largest economy shrank 9.8 percent since the final quarter of last year, less than the 9.9 decline expected. The economy grew 1.5 percent in the previous quarter. Investment, consumption, and industrial production were also down as factories and businesses shut down and millions of workers were thrown out of work.
The country’s economic contraction is the first on record since at least 1992, when the Chinese government began releasing official quarterly data. The numbers represent China’s worst economic performance since 1976, the year Communist Party Chairman Mao Zedong died.
The government has taken several steps to mitigate the financial toll of the pandemic, including slashing interest rates and tax and credit to companies hit hard by the damage the spread of the virus has caused.
Several positive signs for China’s economy also appeared, however. Chinese markets inched up slightly: The Hang Seng Index rose 1.6 percent in Hong Kong and the Shanghai Composite Index climbed 0.7 percent over the quarter. The jobless rate in China also declined last month from a record 6.2 percent in February to 5.9 percent in March. Meanwhile, factory production posted a smaller decline than expected for March.
The coronavirus outbreak originated in the Chinese city of Wuhan and proceeded to spread across China before infecting countries across the globe. The U.S. intelligence community concluded in a classified report earlier this month that China deliberately provided incomplete public numbers for coronavirus cases and deaths resulting from the infection.
Meanwhile, the U.S. has entered a probable recession as social distancing orders keep most of the economy shut down and unemployment claims spike to a record high. As of Friday morning, the U.S. had more than 667,000 positive cases of coronavirus, and more than 30,000 people have died.
