BREAKING NEWS US advisers endorse single-shot COVID-19 vaccine from J&J Full Story
WEATHER AUTHORITY : Flash Flood Watch View Alerts

China is winning the global economic recovery

Millions of people in China are traveling again during the first major holiday since the Covid-19 outbreak. As China shows its confidence in containing the pandemic, will getting the country moving around come at a risk? CNN's David Culver reports.

Posted: Oct 11, 2020 12:41 PM
Updated: Oct 11, 2020 12:41 PM

While much of the world scrambles to prevent new coronavirus cases from stalling the fragile recovery from recession, China's economy is hitting its stride again and will end the year more influential than ever.

The world's second largest economy was the only major world power to avoid a recession this year as Covid-19 forced lockdowns and crippled businesses. China's GDP is expected to grow 1.6% this year, while the global economy as a whole will contract 5.2%, according to summer projections from the World Bank.

China built its relatively quick recovery through several measures, including stringent lockdown and population tracking policies intended to contain the virus. The government also set aside hundreds of billions of dollars for major infrastructure projects, and offered cash incentives to stimulate spending among its populace. The payoff has been evident, as tourism and spending rebounded during last week's busy Golden Week holiday period.

By the end of the year, China's share of global GDP is likely to rise by about 1.1 percentage points, according to a CNN Business calculation using World Bank data. That's more than triple the share it gained in 2019. By contrast, the United States and Europe will see their shares dip slightly.

All told, China's economy is expected to be worth about $14.6 trillion by the end of 2020, roughly equivalent to 17.5% of global GDP.

Even without the disruption caused by the virus, China's share would have ticked up this year, according to Larry Hu, chief China economist for Macquarie Group. But China's ability to buck the worldwide trend is accelerating the growth in its importance to the global economy.

"The recovery in China has been much stronger than the rest of the world," Hu added.

A Golden Week boom

The economic improvement has been no more apparent than during this past week, when the country celebrated one of its annual Golden Week holidays. This season's festivities marked the founding of the People's Republic of China and the Moon Festival, and was one of the country's busiest travel seasons of the year.

More than 630 million people traveled around the country during Golden Week, which ended Thursday, according to the Ministry of Culture and Tourism. That's nearly 80% of the numbers who traveled during the same period last year.

Tourist spending, meanwhile, recovered to nearly 70% of last year's level, reaching $70 billion. And movie ticket sales surpassed $580 million during the Golden Week holiday — just 12% shy of last year's record high.

The holiday week's numbers are "encouraging," said Macquarie's Hu.

"As life is returning to normal in mainland China, consumption, especially the service consumption, is under recovery," he said, added that pent-up demand has finally been unleashed.

A more balanced recovery

Even before the holiday, China's economy had been picking up momentum.

An official gauge of manufacturing activity rose to a six-month high in September. A private survey from the media group Caixin, which measures smaller businesses, also showed the sector continued to expand last month.

The services sector is also doing well. An official survey released last week put activity at its highest level in nearly seven years. And on Friday, a Caixin survey revealed that services experienced one of the quickest paces of expansion in the past decade in September.

"Overall, the economy remained in a post-epidemic recovery phase and improved at a faster pace," Wang Zhe, senior economist at Caixin Insight Group, said in a report accompanying Friday's data.

Consumer spending is rebounding, too, in yet another encouraging sign. Economists were concerned earlier this year that China's recovery was too unbalanced, having been driven by lots of state-led infrastructure projects and not enough consumer spending.

And despite trade tensions, China's economy has also benefited from its vital role in global supply chains, according to Louis Kuijs, chief Asia economist at Oxford Economics. The research and advisory group's own calculations also indicate that China will increase its share of global GDP by about a percentage point this year.

"In contrast to expectations of ... changes in global supply chains away from China, it looks as if, at least for now, China's success in shaking off the Covid-19 outbreak and keeping factories operating has strengthened its role in global value chains," Kujis said. He pointed out that US foreign direct investment into China actually rose 6% in the first half of this year, according to China's Ministry of Commerce.

"Even as US-China tensions have worsened dramatically recently, many US multinationals remain keen to engage with China," Kujis said, adding that American firms were likely encouraged by Beijing's decision to remove some barriers to investing in the country's financial sector.

Challenges ahead

While China's recovery has been strong, there are challenges ahead.

Like in other countries, the pandemic has taken a heavy toll on China's poor and rural populations, according to the Fitch Ratings analysts.

The average monthly income collected by rural migrant workers fell nearly 7% in the second quarter compared to a year earlier, according to World Bank estimates that used Chinese government data. The hundreds of millions of people who fit that description typically work in construction, manufacturing and other low paying but vital activities.

And low-income households in China — those who make less than $7,350 a year — experienced the most severe declines in family wealth out of any other income group, according to a survey jointly conducted by China's Southwestern University of Finance and Economics and Ant Group's research institute.

"This suggests the recent recovery in consumption is likely to have been somewhat skewed towards higher-income groups," the Fitch Ratings analysts said.

And Kuijs of Oxford Economics said that US-China tensions remain a concern, even as foreign direct investment grows.

If the United States were to decouple "significantly from China," the country's growth would trend less than half a percentage point lower per year through 2040, he said, as long as other developed countries maintained most ties.

But if other developed countries join the United States, he suspected that impact could be much larger, causing China's GDP growth to fall twice as fast through the same period.

That kind of "substantial" decoupling "would sharply reduce the country's productivity and GDP growth," Kuijs said.

Mississippi Coronavirus Cases

Data is updated nightly.

Cases: 293542

Reported Deaths: 6638
CountyCasesDeaths
DeSoto19601229
Hinds18712386
Harrison16569277
Rankin12637263
Jackson12483219
Lee9671160
Madison9420196
Jones7914146
Forrest7159136
Lauderdale6798226
Lowndes6014137
Lamar585880
Lafayette5716113
Washington5182129
Bolivar4599121
Oktibbeha440391
Panola428392
Pearl River4138128
Warren4122113
Pontotoc408068
Marshall400392
Monroe3981126
Union393673
Neshoba3777167
Lincoln3491100
Hancock341674
Leflore3363118
Sunflower317385
Tate301574
Pike299193
Scott292868
Alcorn290760
Itawamba289072
Yazoo284962
Coahoma276367
Tippah276165
Copiah276057
Simpson272778
Prentiss268858
Leake252171
Marion251578
Wayne251541
Covington248278
Grenada246277
Adams233377
George231145
Newton226352
Winston221375
Jasper212744
Tishomingo211965
Attala206369
Chickasaw200851
Holmes181770
Clay178250
Stone171829
Tallahatchie170039
Clarke168971
Calhoun157128
Smith152431
Yalobusha143536
Greene127233
Walthall123640
Noxubee122829
Perry121434
Montgomery121338
Lawrence119521
Carroll117923
Amite110932
Webster110030
Jefferson Davis101231
Tunica98823
Claiborne97929
Benton93324
Humphreys92427
Kemper89623
Quitman77114
Franklin75619
Choctaw69516
Wilkinson62226
Jefferson61927
Sharkey48817
Issaquena1676
Unassigned00

Alabama Coronavirus Cases

Cases: 491849

Reported Deaths: 9869
CountyCasesDeaths
Jefferson707641366
Mobile35937724
Madison32307450
Tuscaloosa24024410
Montgomery22502499
Shelby21848214
Baldwin19698277
Lee14926151
Morgan13624251
Calhoun13202285
Etowah13154319
Marshall11243208
Houston10058259
Limestone9348134
Elmore9345182
Cullman8879179
St. Clair8799221
Lauderdale8588210
DeKalb8436174
Talladega7500163
Walker6509251
Jackson6483102
Autauga622890
Blount6084125
Colbert6004118
Coffee5235102
Dale4627106
Russell402930
Franklin398876
Covington3949106
Chilton386298
Escambia377472
Tallapoosa3572141
Clarke343149
Chambers3399108
Dallas3397141
Pike292972
Lawrence282284
Marion281295
Winston246266
Bibb244560
Geneva238870
Marengo233755
Pickens223954
Barbour210651
Hale209068
Fayette199956
Butler195265
Henry182041
Cherokee176438
Monroe166038
Randolph163140
Washington156334
Crenshaw144054
Clay143454
Macon141643
Cleburne137139
Lamar132432
Lowndes130749
Wilcox121425
Bullock116336
Conecuh106523
Perry105427
Sumter98331
Coosa88623
Greene87132
Choctaw54923
Out of AL00
Unassigned00
Tupelo
Cloudy
61° wxIcon
Hi: 74° Lo: 51°
Feels Like: 61°
Columbus
Partly Cloudy
67° wxIcon
Hi: 78° Lo: 55°
Feels Like: 67°
Oxford
Cloudy
55° wxIcon
Hi: 69° Lo: 49°
Feels Like: 55°
Starkville
Mostly Cloudy
66° wxIcon
Hi: 76° Lo: 53°
Feels Like: 66°
WTVA Radar
WTVA Temperatures
WTVA Severe Weather