Impact Of COVID-19 On China’s Record Economic Growth

People on both sides of the pacific have been able to agree on one thing for the most part when it came to China until right now. That being the  Chinese economy has shown positive increase every single year for over fifty years. That is nearly half of a century where there wasn’t a single negative quarter. This all came to an end when China posted its most latest economic measurements.

China’s Governmental Response to the Economic Impact

The overall economy has released its first contraction in the Peoples Republic of China. Their GDP shrank by about 6% in the last quarter. For a country that has gotten used to seeing GDP expansion of inside 6-10% over the last decade every year including the financial crisis of 2008, this is a drop of nearly 20% compared to the earlier forecasts for the country. The CPC has moved on a number of actions to try and combat this growing recession.

Lowering the Cost of Borrowing by Slashing Interest Rates

They have followed the lead of most of the world’s central banks and lowered their interest rates to make money less expensive to access for businesses and consumers.

Cutting Taxes to Ease the Burden

Many tax cuts that have been designed to put more money into the economy have been passed by the government similar to many western nations’ fiscal policy updates recently.

Series of Tax Credits Created

Finally, they have developed a series of new tax credits that can be applied retroactively for businesses. This allows businesses to essentially get a raffle for money they have previously paid in taxes in previous years.

Slight Decline in Chinese Unemployment

There are a couple of pieces of good news amidst all of this negativity. The stock market in China has been showing some gains over the last couple of days. Also, the countries unemployment indicators have shown a slight drop around one-third of a percent less than the previous month. Manufacturing output also saw a lower level of decline than state economists had predicted the previous month.

More information is available at The Telegraph and The Hill

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