China’s economy grows despite the COVID-19 pandemic
COVID-19 has grounded too many economies in the world, but it seems China is getting an economic boost despite lockdowns. China has surpassed the US in production, which has yielded positive fiscal growth.
China’s economy unscathed by COVID-19
Against all odds, the Chinese economy has bounced back to figures before the pandemic. Industries in the country are firing up to meet the increased demand for goods which has seen them raking profits more than expectations.
The gross domestic product increased to about 6.6% in the last quarter of the year which pushes growth to 2.5%. This has made the second-largest economy (after the US) carrying worldwide growth and surpassing the US.
This recovery from China is possible due to the efforts by the government in getting Covid-19 under control and using good fiscal policy to increase investments. Development surges as the country factories are fired up to meet demand from several health firms and food companies.
China enjoyed export largess because it shipped about 250 billion masks from June to December. The shipment was to countries in Africa, Oceania, and other Asia countries. This economic resurgence makes China the sole top nation to have fiscal expansion by December.
Despite the growth, income irregularity is a problem
However, this economic revival comes with a problem, because income imbalances between workers are expected to widen in contrast to other nations.
“ There is a huge gap between production and consumption” According to Bo Zhuang a top financial analyst at TS Lombard.
Supporting the economy using pandemic has caused the economy to reel in debts and the authorities are now making frantic efforts to stabilize the economy. The ruling communist party has said it will withdraw stimulus gradually to avoid sharp-turns in financial policy.
China’s index of small caps is 2% higher while bonds increase to 4 basis points. Onshore yuan declines by 0:08% to 65,654 for one dollar as the greenback rebounded.