As World Falls Apart, China Rises
Author: Graciotto Van Handriyanto
States all around the world remains in the fight against coronavirus, producing medical supplies, increasing hospital capacities, and formulating policies. China on the other hand, begins their economic rebound slowly. An official gauge of China’s manufacturing activity, the Manufacturing purchasing managers index, rises strongly from 35.7 in February to 52.0 in March. Purchasing managers index represents market conditions viewed by purchasing managers, with rating above 50 indicates expansion and below 50 indicates contraction. Yet it is important to see this not as rapid economic expansion but instead as China’s economy being resumed after more than a month of forced idleness due to Covid-19.
In the pursue of economic restoration and growth, China’s State Council offers fresh funds for banks to lend and would allow local governments issue more bonds. It would also extend subsidies and tax waivers for purchases of electric vehicles for two more years in a bid to boost auto sales. China’s ability to pursue growth however are being curbed by weakening overseas demand that might last for the following few months. Two things could be expected from the next quarters: the global economic shock, like it did to China, and China’s rise in the global stage with their economic engine slowly up and running leaving others crippled.