China proves powerhouse of global post-pandemic recovery

Business Friday 27/August/2021 13:48 PM
By: Xinhua
China proves powerhouse of global post-pandemic recovery

Madrid: The sheer weight of China in world economy and recent reports of national growth rates have proved again that China is leading the global recovery from impacts of COVID-19, economic analysts have said.

"China is a key player on the world stage" who has "an increasingly active presence" in the wake of the pandemic, said Ramon Gascon, a professor at the EAE Business School of Spain, in a recent interview with Xinhua.

In the first half of 2021, China's gross domestic product (GDP) jumped 12.7 percent from a year earlier as factories resumed production and people restarted their traveling in China, data from the National Bureau of Statistics showed.

The country remains an economic pillar to the world in terms of its purchasing power and a burgeoning consumers market, said Joseph Revilla Escudero, a New Zealand-based economist.

The World Bank estimated in 2020 that China's GDP per capita, when adjusted by purchasing power parity, equals to 92 percent of the world's average.

Revilla said major carmakers like Daimler and such luxury good giants as LVMH will see their revenues "automatically restored" as China recovers.

As of the global supply chain, Revilla said China's growth will also give fresh stimulus to "the major maritime players, cargo planes and airports."

China's consumer goods sales jumped from 20.6 trillion yuan (about 3.18 trillion U.S. dollars) in 2012 to 39.2 trillion yuan (6.05 trillion dollars) last year, posting an annual average growth of 8.4 percent of a consumer market now second only to the United States in size, official data showed.

Regarding China's role in the global supply chain, Revilla said the national "demand for oil, steel and other raw materials brings a great boost to other economies."

China's relatively low labor costs and tech innovation are factors behind why the country has become a world supplier, said Pedro Nueno, professor of entrepreneurship at the IESE Business schools.

With the edge, China still needs to look out for "potential competitors" from Eastern Europe, Southeast Asia and Africa coming for such a role, he noted.

China, thanks to its deft response to COVID-19, has managed to grow an already big economic volume, secure the supply chains and foster a booming market, said the experts.

Gascon expressed confidence in China's approach. "It is obvious that measures such as restricting flights, lockdowns and isolation were the correct measures," he noted.

Revilla said the manner China put public health measures in place comes as an advantage to getting "the post-pandemic economic boost first," adding that "the world knows how ordered, well organised and hardworking its labor force is."

"Balancing the economy and pandemic has been a master class for the world from there countries," said Revilla.

It should be "no surprise for the Western world that Asia has moved back on (track) as soon as they got the virus under control," he said.

Nueno said that "Chinese people have been closely following government regulations to avoid gathering with other people. Europeans and Americans are generally less likely to follow government regulations."

"China has a structure and a government that allow it to react fast and take decisions," whereas in some other countries, a decision has to go through many institutions despite a looming urgency, according to Gascon.

The Chinese economy is "reactivating," said Gascon, citing a 35.4-percent surge of China's inbound foreign direct investment (FDI) in the first five months of this year.

Revilla said the index gives a good sign since "money always flows in the right direction."