The China effect


Beijing’s rebound from the coronavirus induced economic dip has shocked the world, and quite rightly so. This was, after all, the year that the Chinese economy was going to collapse; not because of the pandemic but primarily because of the trade war, sanctions and all the hostility from Washington. Yet here we are, even as much of the rest of the developed world plunges into a steep recession and almost all of the bigger economies are registering negative growth, China has not only resumed almost all its pre lockdown export operations but also moved very quickly to capture markets that other producing countries have lost because of their own complications with Covid-19.
Also, much to the frustration of the Americans who are trying to tie China down not just for their own economic gains but also to score points ahead of the November presidential election, China has now become the only major economy that is not just actually growing, but growing good enough for the leadership and people to be happy. And in doing this it has shown remarkable resilience. For, when much of international demand shifted from traditional products to items used inside homes, reflecting the reality of the international lockdown and how new patterns impact international trade, China showed how easily it could move its more affordable labour force and use its production capability to manufacture what was more in demand.