Can China be the world’s engine in post COVID-19 recovery?
Song Guoyou, published in Global Times, on 16 July. 2020
China’s GDP grew 3.2 percent year-on-year in the second quarter, reversing from a
6.8-percent contraction in the first quarter. As the first major economy to show a
recovery from coronavirus damage, will China become the world’s “engine of
economic growth” in post COVID-19 pandemic recovery, as it did in the 2008 financial
China’s economy did provide strong leadership for the global economic growth after 2008 With the support of macro policies, China bought vast quantities of raw
materials and goods from other countries, injecting great power into global growth.
Today, the Chinese economy has grown substantially. There is some reason to believe
that China will drive global economic growth more intensely.
However, the situation is different from the last crisis and the problem is not on China.
Compared with the period of the 2008 financial crisis, the current international
political situation has undergone tremendous changes. Some countries have become
unconcerned about whether China can drive global growth economically and they
seem not at all interested in whether the global economy recovers.
The major diplomatic policy aims of these countries have shifted regarding containing
China in geopolitics, ideology and international order, while the COVID-19 pandemic
is raging in their countries. Faced with such an international environment, although
China has the strength and willingness to pull the gloomy global economy out of
recession, it’s hard for it to manage this goal on its own.
The world economy’s relatively quick recovery from the 2008 financial crisis was
largely thanks to global policy coordination and the strong joint forces of all
economies. But now containment has replaced cooperation and exclusion has
replaced tolerance. Some countries impose malicious restrictions on Chinese
investments and flagrantly interrupt trade with China.
The strong restrictions on scientific and technological exchanges by these countries
and their unreasonable sanctions around the Xinjiang and Hong Kong issues are not
conducive to China’s power as a global economic engine.
If these countries allow the trend to continue, the world economic system could be
gradually fragmented, with difficulties in the flow of international economic factors
increasing and obstacles to global economic growth becoming greater.
Because of the new situation described above, it may not be realistic to expect China
to drive global economic recovery as it did in 2008. The latest data shows that China’s
imports and exports both increased in June. However, the decline in China-US trade is
more obvious and China-Europe trade has slightly decreased.
China’s trade with ASEAN has grown significantly. ASEAN has become one of the
fastest growing regions in the world, which is closely related with the region’s
increasingly integrated economic links with China.
The key to whether China can become the major driver of the global economy this
time depends on whether other countries can meet with China half-way and exert
joint efforts to promote global economic growth.
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