China’s Ultra-Fast Economic Recovery: A Closer Look
The hard-hitting global effects of the COVID-19 pandemic have been felt around the world. As economies took a plunge, many countries are still on the mend. Yet, some have managed to recover more quickly than others. China, in particular, stands out thanks to its incredibly fast economic recovery. Let’s explore how this happened, and what the future may hold for the powerhouse nation.
The Immediate Effects of the Coronavirus
As would be expected, the economic impact of coronavirus on China was felt in much the same way as everywhere else. In early 2020, many factories across the country were forced to grind to a halt, essentially bringing production to a standstill. In addition, consumer purchases decreased significantly as people stepped back from spending and economic uncertainty gripped the nation.
Undertaking Massive Measures Quickly
Where China has outperformed on the world stage is in how quickly it got to work at reversing the impact of the pandemic. To that end, they introduced massive measures aimed at keeping their economy afloat in record time.
One of the first steps involved the implementation of the world’s largest fiscal stimulus package, totalling at least 10 trillion yuan (or $1.5 trillion). The funds were aimed at propping up small businesses, keeping employment levels up, and encouraging consumer spending.
That was soon followed by an increase in infrastructure spending. Of note, several large-scale projects were initiated in 2020, including a major rail construction program, as well as road and power grid upgrades across the country.
The Third Plenum: A Bold Move
Arguably one of the boldest moves was the Third Plenum of the 19th Communist Party of China, held in December 2020. During this meeting, the attendees discussed a wide variety of economic reform initiatives, with the aim of increasing spending to obtain economic growth in the medium and long term.
Included in their plans is a loosening of regulations to facilitate more foreign investments, as well as increased funding to encourage digitisation and the widespread adoption of new technologies.
A Look at the New Normal
Due to the aggressive strategies employed, China’s economic recovery has been nothing short of amazing. As of 2021, the nation has managed to return to a state of pre-pandemic stability.
The shift to the “new normal” means that recovery is further supported by impressive economic indicators. To that end, China’s industrial production and fixed asset investments have returned to levels seen before the pandemic.
In light of this, the future for the country looks better than ever. A key indicator of this is the success of the 2020-2021 shopping spree, a period spanning from Chinese New Year to Valentines Day. During this period, Alibaba – China’s version of Amazon – reported over a trillion yuan in sales, representing a 34% increase from the year before.
What the Future May Hold
Going forward, experts believe that there are more positive things to come. This is further cemented by the new measures adopted in the recent Central Economic Work Conference.
The conference has laid out the five-year plan (2021-2025) which aims to bolster domestic demand and boost spending across the nation. The announced measures are expected to support household consumption by ensuring steady income and job security, as well as increased tax deductions for consumables and luxury items.
At the same time, the Chinese government is also determined to accelerate the introduction of green energy solutions. This is further proof of the nation’s commitment to achieving a greener and healthier future.
Given the effects of the pandemic and the initiatives put forward by the Chinese government, it is plain to see that a recovering economy is just the beginning of what the nation can achieve. The future looks fantastic for China, and their swift recovery has become yet another remarkable reminder of the nation’s immense promise.
