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With the world grappling to find solutions to the novel coronavirus pandemic consistently, one country that has managed to grab the headlines for its efforts is China. Over the last few months, China has seen a dramatic shift towards recovery, with numbers indicating regional GDP performing as better-than-expected. As countries worldwide continue facing prolonged economic recessions due to the impact of COVID-19, China’s economy rebounding has come as a welcome surprise.
The efficient handling of COVID-19 by China’s authorities has played a remarkable role in its economic resurgence. The country implemented a stringent lockdown, social distancing measures, and quarantining measures early in the outbreak, providing it with an early advantage over other countries. In addition, the Chinese government has been using a ‘Zero Covid’ approach, intending to eliminate any new outbreaks and keeping them under control if any arise.
China’s resilient economy emerged relatively unscathed from the pandemic despite the colossal disruption that plagued many other countries. China’s stringent measures have largely stemmed the spread of COVID-19 to manageable levels, raised consumer confidence, and consequently contributed to the steady improvement in economic activity. The perception of COVID-19 amongst Chinese consumers has changed over time, from fear and panic to self-assurance with anti-epidemic measures in place.
One sector that saw a boost during the pandemic’s peak was e-commerce, with online shopping exploding as people stayed home to adhere to lockdown restrictions. With online retailers such as Alibaba, JD.com, and Pinduoduo dominating the internet commerce space, Chinese consumers have gradually shifted to online shopping during these pandemic times. Recent data shows that online retail sales have been surging. Sales have seen a growth of 14.8% YoY, up from last year’s 13.1% YoY, and is expected to hit $2.8 trillion this year, marking a new milestone for the Chinese economy.
With the easing of lockdowns and the opening of industries, offline retail is getting back to business, albeit cautiously. Retail businesses have implemented measures to ensure a safe shopping environment. This strategy has been successful and resulted in a wave of consumer demand, boosting domestic consumption significantly. These measures have been so successful that the Chinese economy in the second quarter of 2020 bounced back to a 3.2% QoQ growth, amid the global economic downturn.
China’s quick economic comeback can be attributed to its quick and decisive actions taken against the pandemic. Unlike the U.S. and Europe, China successfully contained the spread of the virus before it got out of hand. China’s experience with the SARS outbreak in 2003 has made the government robust in implementing new anti-epidemic measures to counter the novel coronavirus outbreak. The government, along with the public, worked together to ensure every citizen got tested and, if necessary, isolated, and treated. The country’s extensive healthcare system allowed them to track, isolate and treat sharply reducing infection rates.
Another way China’s economy rebounded was ordering further infrastructure projects, which is part of its economic stimulus package to jumpstart the economy. Notable projects include expanding intercity railways, building 5G networks and enhancing demand in other sectors that were hit hard during the pandemic. This economic stimulus package has had tremendous results, with China’s economy showing steady growth since Q2 2020.
China’s swift economic recovery has also been buoyed by its domestic market, including its tech sector, which is now robust and competitive with the U.S. and Europe. Companies such as Huawei, Tencent, and Alibaba are all home-grown companies that have enjoyed success in competing with well-known international brands. As the consumer market shifts towards an online shopping experience, the tech sector is expected to see even more growth in the coming years.
In conclusion, China’s ‘Zero Covid’ approach and decisive measures against the pandemic have led to the country’s economic revival. The country’s government reacted quickly and efficiently, surpassing its peers globally to contain the virus spread, and sent a signal to the world that ‘we are open for business.’ While China’s economy faces challenges like every other country, the nation’s resilience in handling the pandemic could provide a blueprint for others seeking to recover from the doomsday effects of COVID-19.
