The Bloomberg news agency said that imposing a public shutdown in China due to the coronavirus could slow the country’s economic growth in 2022 and allow US economic growth to surpass its Chinese counterpart for the first time since 1976.
According to Bloomberg Economics experts, China’s GDP may grow by only 2% this year, while the US GDP will grow by 2.8% this year.
Beijing, meanwhile, is pursuing a “corona zero” policy set by President Xi Jinping, which imposes severe restrictions on (economic) activities in the event of a virus outbreak. The United States is struggling with high inflation due to strong employment and consumer spending.
According to the World Bank, this is the first time since 1976, when China emerged from the turbulent decade of the Cultural Revolution, that China’s overall year-on-year growth rate has lagged behind that of the United States, if forecasts for GDP remain stable. .
The agency noted that US President Joe Biden, who is urging lawmakers in Congress to pass a legislative package aimed at boosting US competitiveness with China, said the result of this relative growth in China is in the hands of the agency. Will bring. Biden has set his economic agenda in part to show whether democracies can stand up to the “authoritarian model of the object.”
The risks to the object are even higher (who is expected to win a third term in office in an unprecedented move later this year). The 2% growth rate will be much lower than the government’s official growth target of about 5.5%. Year
The agency said it was also the first time since China’s target setting in the late 1990s that China’s growth rate had fallen significantly below its official annual target.
Prior to the recent wave of quarantine in major cities, including Shanghai, which devastated domestic spending, this year’s target of “about 5.5%,” the lowest figure in history, was set by Chinese leaders. Some economists now estimate that China’s GDP fell this quarter amid declining retail and industrial production in April.
“China still has policy options,” say Citigroup Inc. economists Xiangrong Yu and Xiaowen Jin. “At this juncture, the timely and decisive implementation of real stimulus measures is crucial to resuming growth in the real direction.
Source: Lebanon Debate
