The damage to Chinese economy from coronavirus predicted to be greater than 2008 global financial crisis. Chinese industrial production plunged by 13.5%,fixed asset investment plunged by 24.5% and retail sales plunged 20.5%. The biggest loses expected in labor intensive sectors and long supply chains.
In China low demand for restaurant services and low demand for real estate expected to continue in second quarter 2020. Real estate market sales fall 39% and new housing starts fall 44% this year. China re-opened factories but in low demand time in may take a few months for goods to be shipped around the world. Worldwide demand for “made in China” products are low because of fear of coronavirus. Weaker goods export demand triggered also by imposed tariffs by US.
Chinese authorities have taken important policy steps to soften influence of COVID-19: cut repo rate, provide ¥800billion in emergency loans,some taxes and fees postponed or suspended, fiscal and trading stimulus, RMB devaluation.
Chinese economy will depend on how country will prevent second wave of COVID-19. Also economy will depend on how fast coronavirus will be eliminated worldwide.
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