Industrial output plunges 13.5% and the unemployment rate jumps to a record 6.2%
A woman wearing a protective mask cycles by a portrait of Chinese President Xi Jinping in Shanghai, China, March 12 2020. Picture: REUTERS/ALY SONG
The outbreak of deadly viral pneumonia in Wuhan dramatically worsened in January, prompting China to lockdown Hubei province, extend holidays and restrict travel and business across the country. That brought much of the nation’s economic activity to a halt in February, undercutting a stabilisation seen in December. GDP is now all but certain to contract in the first quarter compared to the same period last year — the first time that has happened since comparable data begins in 1989.
“China’s containment of the epidemic is bearing fruit, but there is a challenge ahead in controlling the spread in other countries,” National Bureau of Statistics spokesperson Mao Shengyong said in Beijing after the data was released. “Growth of the global economy and trade may slow to some extent, which will exert some impact on China’s economic growth.”
Though there are increasing signs that companies and people are getting back to work in March, the economy is still not back to normal. Policymakers may soon have to choose between easing more aggressively to hit a growth target that’s expected to be set at about 6% for 2020, or continue with its current measured and targeted strategy. This contraction in the first two months will make that growth rate much harder to achieve, and will also affect the possibility of reaching other targets.
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