China, which announced a host of stimulus measures including fresh tax and fee cuts in a bid to boost its coronavirus-hit economy, is struggling to get back to its feet with large scale cancellation of export orders from across the world.
The world’s second largest economy has been hit hard by the global slowdown and large-scale cancellation of export orders.
China opened up its economic activities since March-end after it managed to contain the spread of the killer virus but the going has been tough for its domestic manufacturers as global demand has taken a beating. Besides, the rising trust deficit between the world and China—the largest supplier of goods globally—has also become a cause for worry for the Asian giant.
China's economy in the first quarter, January to March, declined by 6.8 per cent for the first time since 1992 when it started recording quarterly growth figures.
The contraction of the economy in the first quarter and an imminent slowdown this year will also lead to a massive job loss as many smaller companies file for bankruptcies. The world’s most populous country registered an unemployment rate of 5.9 per cent in March and 6.2 per cent in February.
“As China finds itself isolated in many spheres after it came under the scanner for its handling of Covid-19, it is increasingly becoming aggressive in its military operations and the recent stand-off between India and China is just one example,” an analyst on condition of anonymity told IN.
Many companies with manufacturing facilities in China have already indicated that they were keen to shift out of the country. Many of these companies are looking to shift their factories to countries including India, Vietnam, Myanmar Bangladesh and Thailand.
The International Monetary Fund in a report said that the coronavirus pandemic and the subsequent measures taken to combat the disease, which includes total lockdown in several countries, will have a huge economic impact global growth. “As a result of the pandemic, the global economy is projected to contract sharply by –3 percent in 2020, much worse than during the 2008–09 financial crisis,” IMF said..
