BEIJING – Fears are mounting among major powers that Chinese President Xi Jinping may attempt to bolster his influence in the global arena, as the country’s economy could be the only one to soon get back on its feet amid the coronavirus pandemic.
While the outbreak has undermined economic activities worldwide, a deceleration in the number of new infections in China has allowed a large number of companies to resume production, helping to ease a supply shortage at home.
Some pundits warn that China will boost output in the nation and then try to control the flow of key products to other countries, including critical components for advanced technologies, as well as medical goods like face masks and protective suits.
But skepticism remains over whether China’s economy can recover at a pace the communist-led government expects, seeing as the possibility cannot be ruled out that a so-called second wave of infections will exact an even heavier toll on domestic demand.
If China, dubbed the “world’s factory,” again steps up measures to restrict the movements of people and goods to contain imported infection cases, the nation’s trade is also certain to shrink further.
Other countries, meanwhile, have become eager to reduce economic dependence on China following the disruption of supply chains stemming from the spread of the virus, which would hurt the world’s second-biggest economy down the road, one expert said.
China said Friday that the nation’s economy marked its first quarterly contraction on record during the January-March period, down 6.8 percent from a year earlier, with industrial production decreasing 8.4 percent and retail sales plunging 19.0 percent.
As the overall goods trade fell 6.4 percent in the quarter, China’s National Bureau of Statistics voiced wariness over the future course of the economy.
“We are now facing rising pressure of the prevention of imported epidemic infections and new difficulties,” the bureau said in a statement.
Nevertheless, other indicators have shown signs that the Chinese economy has been bouncing back.
Beijing said late last month that the official Purchasing Managers’ Index, or factory activity data, for March was 52.0, up sharply from a record low of 35.7 in the previous month. A reading above 50 suggests optimists outnumber pessimists.
On April 8, the monthslong lockdown imposed on the central Chinese city of Wuhan, the epicenter of the coronavirus outbreak, was lifted. Many firms, including Japanese automakers, have restarted production at their factories there.
The International Monetary Fund said earlier this month that China’s economy is projected to expand 1.2 percent in 2020, indicating it may return to a growth path later this year.
In Beijing, citizens have lined up outside popular restaurants recently. Face masks and sanitizers, for which demand is believed to have skyrocketed globally, have been readily available everywhere in the capital.
“It appears that China has been actively increasing production of goods that other countries really need. It has been apparently aiming to manage the supply of such products to take the initiative in the global economy,” a diplomatic source in Beijing said.
Kokichiro Mio, a senior researcher at the NLI Research Institute in Tokyo, echoed this view.
“It’s possible that the Chinese economy will develop its presence, resulting in major changes in power relationships in the world,” he said.
Chinese Foreign Ministry Spokesman Zhao Lijian rebuffed such speculation earlier this month.
“China’s goal is nothing but making concerted efforts and giving mutual assistance to tide over difficulties together” with the international community,” he told reporters at a news conference.
The outlook for the Chinese economy, however, is not completely bright.
The numbers of asymptomatic patients, as well as imported cases, have been rising, sparking concerns of a possible second wave of infections.
Moreover, a potential global recession, triggered by the pandemic, and a growing trend of less reliance on China as a link in the global supply chain, are set to deal a crushing blow to the export-oriented Chinese economy.
In March, China’s exports showed signs of a rebound falling only 3.5 percent from a year earlier, after plummeting 15.9 in the first two months of 2020. But some analysts say the country’s trade may remain sluggish for an extended period.
“To grapple with prolonged external environment changes, we need preparedness in mind,” Xi said at a meeting of the ruling Communist Party on April 8,. “We should address the increasing severity of the international epidemic and the economic situation.”
Japan’s MUFG Bank warned in a report that China would still have difficulties as other economies grappled with the economic fallout of the pandemic.
“The level of economic activities has significantly declined in Europe and the United States, while traffic is likely to continue to be restricted for the time being,” it said. “Under such circumstances, it is difficult to expect that the Chinese economy will achieve a full-fledged recovery” in 2020.
The last time China’s economy recorded a full year of economic contraction was 1976, the final year of the decadelong Cultural Revolution initiated by founder Mao Zedong that observers say left tens of millions of people dead.
The new coronavirus, which causes the respiratory disease COVID-19, has so far infected more than 2 million people, with fatalities reaching around 150,000 worldwide, according to a tally by Johns Hopkins University.
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