With the global economy in uncertainty due to the COVID-19 coronavirus pandemic, China is in a unique position to lead the subsequent recovery. After an unprecedented lockdown, which largely paralyzed business for at least two months, the Chinese economy is recovering.
The Chinese economy is still facing great challenges because the coronavirus has now hit hard elsewhere in the world, causing major disruptions to world trade. This is a big burden for China as an important trading country. In the first quarter of this year, the Chinese economy contracted by 6.8 percent, the country's first downturn since 1992.
Leaving China is not an option for most companies
Since the outbreak of Sars in 2003, the interconnectedness of the Chinese economy with the rest of the world has increased significantly. China is now responsible for around 19 percent of global exports, up from 8 percent back then. Trade tariffs with America and the constraints of the corona pandemic have exposed its vulnerability.
Yet only 11 percent of European companies are considering shifting investments to other countries, similar to previous years. Where low-skilled labor is used, that process can proceed quickly. But for most companies, they are here in China for the Chinese market.
Increase in support of the World Health Organization(WHO)
While Trump announced to sever all ties with the WHO, China has agreed to provide additional support to the WHO. The donation aimed to support the global fight against COVID-19, in particular strengthening health systems in developing countries.
Ultimately, a global recovery will depend on the ability of governments around the world to contain COVID-19, preventing future outbreaks and allowing countries to restore their economies. In the case of the economic crisis set off by COVID-19, economic recovery begins with an effective public health response across the globe.