As vast tracts of the developed world grapple with a second wave of COVID-19, life in China is returning to normal, and the country is on track to do what virtually no other country will achieve this year: Grow its economy amid the pandemic.
China’s economy was 4.9 per cent larger in the July-September period of this year than it was a year earlier. Compare that to Canada’s economy, which was 3.8 per cent smaller in August than a year earlier. The U.S. economy is about 3.5 per cent smaller than before the pandemic.
And according to a forecast from the OECD released in September, China is the only major country likely to see its economy grow overall in 2020. It sees the global economy as a whole shrinking 4.5 per cent this year.
Watch: China’s economy surges following coronavirus lockdown. Story continues below.
After a lockdown of Wuhan province earlier this year that was among the most draconian anywhere, China’s COVID-19 case count has barely increased since spring. That has allowed it to reopen vast tracts of its economy. And China’s manufacturing-heavy economy is pumping out exactly the things people want amid this pandemic.
China has seen “strong production of personal protective equipment goods, for which the demand continues to remain high,” economists at National Bank of Canada wrote in a report issued Friday.
“Abroad, social distancing measures have halted many services and people are spending more time at home… It should come as no surprise that the demand for goods is increasing much faster than that of services,” Alexandra Ducharme and Jocelyn Paquet wrote.
They noted that, despite the economic slump in the U.S., consumers there spent 6.7 per cent more on goods in the third quarter than they did a year earlier. Spending on services was down 7.7 per cent.
China’s share of global trade shot up to a record high of nearly 17 per cent this year, the National Bank economists said.
National Bank Financial Markets This chart from National Bank of Canada shows China’s share of global trade spiking amid the pandemic.
The OECD’s forecast from September noted China has also benefited from aggressive infrastructure spending during the pandemic.
“China is the only G20 country in which output is expected to rise, fueled by the earlier timing of the virus outbreak, rapid control of the virus, and the policy support provided to enable a quick rebound in activity,” the forecast stated.