CHINA STILL STRUGGLING TO RECOVER FROM COVID-19
China is trying to dig itself out of a steep economic slump. But as the rest of the world still battles with the COVID-19 pandemic the path to recovery is looking slow and painful, Laura He wrote for CNN Business in the afternoon of June 8, 2020.
Exports in the world's second largest economy last month dropped 3.3% in US dollar terms compared to a year ago, customs data released this weekend showed, reversing a 3.5% rise in April.
Analysts attributed the downturn to weak demand abroad: While China began reopening its economy months ago, many other global powers only just started to lift some lockdown measures within the past few weeks. The recovery at home hasn't been entirely smooth for China either. Imports last month plunged 16.7% in US dollar terms from a year ago — the deepest contraction since January 2016 — suggesting domestic demand remains sluggish. "The imports data point to a weaker domestic economic trajectory upon opening up than feared, even as China begins to ramp up infrastructure spending," wrote Mitul Kotecha, senior emerging markets strategist at TD Securities wrote in a Monday research note.
China — which was struggling with a slowing economy even before the virus hit — has been trying to spend its way out of the slump. The country promised last month to throw 3.6 trillion yuan ($500 billion) at its economy this year in tax cuts, infrastructure projects and other stimulus measures as part of a bid to create 9 million jobs and blunt the fallout from the pandemic.