Pandemic response credited in economic rebound
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Shanghai's city view. [Photo/IC]
Driven by increased retail spending, China has seen more significant growth than other major economies, thanks to effective measures to get COVID-19 under control, said experts.
China reported economic growth by 4.9 percent year-on-year in the third quarter, up from 3.2 percent in the second quarter. Its GDP growth reached 0.7 percent over the first three quarters, turning positive from negative 1.6 percent in the first half, according to China's National Bureau of Statistics (NBS).
The strong economic data indicate that China has become the first major economy in the world that has resumed growth to pre-pandemic levels, while economic activity in the US, Europe and Japan has fallen off.
"China has managed to get the pandemic much better under control than Europe and the US. As a result, the retail sector has been recovering much faster in China as consumers feel more secure to be in public spaces and in stores, compared to the countries which are still strongly impacted by the pandemic," Daniel Langer, CEO of brand strategy firm Équité and professor of luxury strategy at Pepperdine University in California, told China Daily.
The luxury sector has been the driving force behind the retail recovery, and it's also driven by the repatriation of luxury consumer spending in China, he added.
In China, consumer spending rebounded to pre-pandemic levels for the first time. Retail sales increased by 3.3 percent year-on-year in September, sharply up from 0.5 percent in August, according to the NBS data.
"The new pandemic wave in Europe and the US is a signal that the Western economies will be still hampered for months to come," Langer said. "To make matters worse", historically the unemployment rate has been one of the economic indicators that recovers the slowest, said Langer. "The high unemployment rate in the US has the potential to hamper the economic recovery far beyond 2021."
The US Bureau of Labor Statistics reported the country's unemployment rate at 7.9 percent in September, with 12.6 million people unemployed. The International Monetary Fund forecasts the US economy to shrink by 4.3 percent, and China's economy to grow at 1.8 percent this year.
As the COVID-19 pandemic "has compounded challenges for brands", companies need to focus on opportunities in China, "the largest country to emerge from the crisis, and go from defensive to offensive", said Langer.
"China's outstanding economic recovery is due indeed to the way it handled COVID-19. China's effort stands out head and shoulders above every nation in North America and the EU," said John Walsh, an antiwar activist and retired professor at the University of Massachusetts Medical School.
"This is evident in the high praise lavished on China by the WHO and the outstanding medical journals in the West —The Lancet and The New England Journal of Medicine," he continued.
"China's superb effort has even been acknowledged, however begrudgingly, in the mainstream press, at least in the business press, which is less ideological than the rest because businesspeople like scientists and physicians need to operate on facts."
In contrast, the response of the US has been "a disgrace", he said. Apart from the role of President Donald Trump, who has "certainly done more than his share of the damage", Walsh also noted that there has been "a systemic failure" in the West.
"The West is able to mobilize itself for war but not for a pandemic, that is, to take lives but not to save them. This suggests that there is something very wrong in the organization, values and priorities of our Western societies. It seems we might learn from the East," he argued.
"China did the right thing morally, and it turns out that it is also the sound thing economically. The West showed far less concern for life, and that, coupled with ineptitude and incompetence, has produced some very tragic results," he said.
By LIA ZHU in San Francisco | China Daily Global | Updated: 2020-10-27 08:56