We're Live Bangla Wednesday, June 07, 2023

Bright spot amid the gloom

Vista of views-14-07-2020

In its recently released World Economic Outlook, the International Monetary Fund predicts that the global economy will contract by 4.9 percent this year. The worst performance the report has ever projected, mainly due to "below-expectations drops" in global consumption and services, as well as the "catastrophic" blow the global labor market has received.

With countries having to take drastic actions to contain the virus, and some countries ruing the cost of not taking them, the virus has had a greater toll on economic activities around the world in the first half of the year than anticipated. With recovery expected to be more gradual than previously forecast and vulnerable to further shocks, it is no surprise that the situation appears to be grim.

Yet there is one bright spot amid the otherwise gloomy picture. As a result of "stronger than anticipated recovery in investment and services", the IMF predicts the Chinese economy will grow by 1 percent this year, making it the only major economy that is expected to register growth this year.

Data released by the Chinese government corroborate the IMF forecast. The purchasing managers index for the manufacturing sector, for example, came in at 50.9 in June, the fourth month running for it to stay above the boom-bust line of 50, which suggests a steadily expanding manufacturing sector. Figures for other sectors ranging from real estate to infrastructure construction, and from rail freight transport to express delivery, also showed a robust revival of the Chinese economy after its enforced dormancy.

Thanks to timely and effective prevention and control measures, including lockdowns where necessary, as well as policies to promote a quick resumption of work and production activities once the virus was basically contained, the economy has been put back on track in a short period of time, which once again proves how resilient the Chinese economy can be in the face of unprecedented difficulties.

As China contributes to more than 30 percent of the global growth, the quick recovery of its economy should instill confidence that the global economy can get back on its feet if countries can get to grips with the virus.

To help countries do so, China has launched the largest global emergency humanitarian operation in history, providing assistance to 150 countries and four international organizations, and sharing its successful containment experience.

Rather than talk of decoupling or promoting breaking of the world into two markets and industrial chains, countries should work with China to fight the pandemic and come through it together.

China will continue to play its part, and remains firmly committed to opening up its economy wider to the outside world, and its door to cooperation remains open to all countries.