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Opinion and Editorial

KT edit: Long road to recovery

Filed on September 16, 2020


For a country that was the first one to experience the Covid-19 crisis, and also arguably the first out of it, China's economic data should serve as a reckoner of sorts for world economies on what to expect in terms of recovery patterns. The latest assessment of industrial output in China, an important indicator in an economy, doesn't inspire much confidence. China's growth in industrial output in August has been its lowest in 17 years, which is in sharp contrast with the figures released in April, when it had registered year-on-year growth.

The country has been impacted by the ongoing trade war with the US, and the current Covid-19 crisis has done little to keep the levels of domestic consumption up to support the economy. The recovery so far has been uneven. Much like in other countries, the crisis is widening the inequality gap. The average households are suffering. While the rich are becoming richer, the poor are becoming poorer. Even at a growth rate of over 5 per cent a year between 2021 and 2025, the average households might not be able to benefit as much. Now this predicament isn't just about China alone, it is the case in many countries. How China and others support the most vulnerable and average households in coming months will direct the respective economic trajectories. For now, it looks like a long road from lockdown to normalcy.


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