NYT: With COVID-19 Under Control, China’s Economy Surges Ahead
Tue October, 2020, Age: 3 years
China’s economy grew by 4.9 percent from July-September according to recent data from the National Bureau of Statistics. The United States and other nations are expected to report a third-quarter surge too, but they are still behind or just catching up to pre-pandemic levels. The vigorous expansion of the Chinese economy means that it is set to dominate global growth — one Chinese analyst has calculated that China will account for at least 30 percent of the world’s economic growth this year and in the years to come. China’s economic recovery has been dependent on large-scale state investments in infrastructure, including highways, train lines, and high-tech industry zones. Real estate and infrastructure investments have been more recently supported by the beginnings of a recovery in domestic consumption, which for many months was one of the sectors hardest-hit by COVID-19. This rebound has also been fueled in large part by overleveraging; this year has seen a jump in overall debt equal to a third of the economy’s overall output.
Another risk to China’s recovery is its heavy dependence on exports. The surge in exports in the past three months, along with lower prices for imports of commodities, accounted for a sizable chunk of economic growth. China’s recovery has also done less to help the rest of the world than in the past because its imports have not increased nearly as much as its exports. This pattern has created jobs in China but placed a brake on growth elsewhere.