Impact Of COVID-19 On China’s Record Economic Growth
People on all sides of the pacific have been able to agree on one thing for the most part when it came to China until right now. That being the Chinese economy has shown positive increase every single year for over fifty years. That is just about half of a century where there wasn’t a single unfavorable quarter. This all came to an end when China posted its most recent economic metrics.
The Economy and the Chinese Governments Response
The overall economy has posted its first contraction in the Peoples Republic of China. Their GDP shrank by around 6% in the last quarter. For a country that has been used to seeing GDP growth of inside 6-10% over the last decade every year including the financial tragedy of 2008, this is a drop of just about 20% compared to the previous forecasts for the country. The CPC has moved on a number of actions to try and combat this growing recession.
Reducing the Interest Rates to Ease Borrowing Costs
They have followed the lead of most of the world’s central banks and lowered their interest rates to make money cheaper to access for businesses and consumers.
Lowering Business Taxes to Help Economy
Many tax cuts that have been created to put more money into the economy have been passed by the government comparable to many western nations’ fiscal policy updates of late.
Creation of New Tax Credits
Finally, they have introduced a series of new tax credits that can be applied retroactively for businesses. This allows businesses to effectively get a raffle for money they have previously paid in taxes in previous years.
Slight Decline in Chinese Unemployment
There are a few pieces of good news in all of this negativity. The stock market in China has been showing some increases over the last couple of days. Also, the countries unemployment levels have shown a slight decrease around one-third of a percent less than the previous month. Manufacturing output also saw a lower level of decline than state economists had predicted the prior month.