facebookChina's economy saw growth of 2.5% in Q2 as lockdowns end and as stimulus kicks in. Why is it that China's economy is able to pick up from COVID-19 so quickly? - Seedly

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Anonymous

15 Jul 2020

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China's economy saw growth of 2.5% in Q2 as lockdowns end and as stimulus kicks in. Why is it that China's economy is able to pick up from COVID-19 so quickly?

I know China is self-sufficient even if it doesn't rely on international trade. But is that the main reason and if not, what is it?

Discussion (2)

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Alex Chua

15 Jul 2020

Seedly student Ambassador 2020/21 at Seedly

These are my thoughts:

  1. China has the strictest action against COVID- 19. Thus, you will expect China to recover first. This is proven by historical events

  2. China has about 1.4 billion population. Just internal spending alone allows China to recover China's economy. Note that China is the one who help the world to recover 2008 Financial Crisis

  3. China is the 1st/2nd world's largest economical power with healthy balance sheets.

  4. China has the world's largest manufacturing powerhouse

  5. Most millionaires/ billionaires are now found in China. Their involvement helps China to recover

  6. China is in the forefront of the industry 4.0 technology such as AI, blockchain, etc. They are also engaging in installing 5G technology

In conclusion, there are a lot of economical activities ongoing within China. Above are few examples I recalled

A large part of the reason might be because manufacturing has picked up because lockdowns has been largely lifted, which might explain the growth despite the negative outlook for the economy. Of course the degree of lockdown has to do with the number of (reported) cases of COVID19.

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