Chart of the Week: China’s Economic Growth Amidst COVID-19
By Yinan Zhang
In the aftermath of the COVID-19 outbreak, China’s economic growth dipped into negative territory with a year-on-year growth of -6.8 percent in the first quarter of 2020, compared to growth rates above 6 percent in previous years.
As the epidemic got under control within China and support measures were deployed allowing the reopening of the economy, growth recovered, gradually reaching 4.9 percent by the third quarter. The pickup in economic activity has been mainly driven by investment activity, while consumption has remained sluggish (Exhibit 1).
On the supply side, both the secondary (manufacturing) and tertiary (services) sectors were hit hard in the first quarter (Exhibit 2). However, the manufacturing sector has experienced a more rapid recovery, partly aided by policy support.
The data for Quarter 4 of 2020 will be released in January 2021. The ultimate strength of the recovery remains to be seen.