January 27, 2021 –
The coronavirus pandemic appears to have gained significant ground in Europe, America and the rest of the world. In several countries, a second confinement has been declared. But China, which was the starting point of this health crisis, seems to have moved on since its deconfinement. After halting the spread of the virus on their soil, Chinese authorities rushed to revive the country’s economy.
Chinese GDP recently increased by 4.9% compared to the last quarter of 2019. China has thus become the only country whose economy is doing well despite the global health crisis. However, this growth is not to everyone’s liking. Thus, among the country’s direct competitors, fear and mistrust increase as its economy grows.
China: a battle won against the coronavirus
China has proven to the world that it is possible to bounce back from a major crisis. The proof is obviously the GDP which rose by 4.9% compared to the year 2019. We must not hide the fact that the Chinese brought out heavy artillery to face the epidemic. It was rampant in the country between December 2019 and April 2020. The most egregious example is the test carried out by the government on nearly 10 million people in the city of Qingdao after the presence of cases was reported there. asymptomatic. The various actions carried out ended up bearing fruit.
Today in China, the epidemic is a thing of the past. There are barely 10 cases per day out of nearly 1.4 billion inhabitants. Thus, just after the lifting of confinement, the Chinese hastened to get back to work with more dynamism. In a few weeks, the Chinese economy has regained its former colors. This economy is now doing so well that it alone could account for about a third of global growth at the end of 2020.
Surprising growth in the midst of the global crisis
The strategy used by China to revive its economy after deconfinement is one of the most ingenious. As global demand fell, the Chinese simply fell back on their domestic markets. Thus, significant public investments have been launched in several infrastructures such as TGV lines and highways. Even the retail sector has benefited from this growth. However, the manufacturing sector, the main engine of economic growth in the country, should be more affected by the pandemic.
In fact, in Q3, retail sales represented no less than 0.9% of the growth rate. Compared to 2019, the automotive sector, for example, recorded an increase of 11.2%. This gives it a double-digit progression over nearly 5 months. Jewelry, cosmetics, alcohol and tobacco have also benefited from the resumption of economic activities. This justifies the large number of traditional weddings celebrated in the country after confinement. As for online sales, which exploded during containment, they have kept their growth.
A final sign of the palpable growth of the Chinese economy is the state of its stock market. We can note for example an increase of nearly 15% of the CSI 300. The securities listed in Shenzhen and Shanghai exceeded, for the first time, 10 trillion dollars. Let’s just say for a long time that the Chinese financial market has never done so well.
An economic take-off that raises fears
Many believe that an economically powerful China does not bode well. Moreover, if it thrives in the midst of a crisis, when the United States and the rest of the world are struggling to save their economy, it is even worse. This renewed Chinese economic power has aroused mistrust and more fear on the part of its American and European competitors.
The consequence of this mistrust resulted in a few months in several conflicts of interest which have continued to accumulate since. We can cite, for example, an increase in mistrust of companies linked to the Chinese Communist Party, the armed clashes between China and India on the Indian border and the repression in Hong Kong and Xinjiang.
For many countries, China is no longer seen as a partner, but rather an adversary that must be slowed down at all costs. Currently, China has never been so frowned upon by the rest of the world. This situation prompted the European Commission for the first time to qualify the country as a “systematic rival”.
For their part, the Chinese leaders have understood what is happening. In fact, to try to calm the heat, China’s new plan for 2035 goals has been somewhat moderate.
Finally, the current crisis has allowed China to take a big lead over other countries. At the same time, the latter, especially Westerners, have become aware of their excessive dependence on the Asian giant. And solutions are being considered to remedy it. The world may be heading towards global decoupling.
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