China's economic recovery from the coronavirus pandemic
In this podcast Brian Blackstone chats to Credit Suisse's head of China Quantitative Insight David Murphy about how China's economy is responding to the COVID-19 pandemic.
As the world's second-biggest economy with a rapidly-growing middle class, China will be key in determining how quickly the world economy can snap back from the pandemic shock.
China is recovering but slowly
"There is recovery but it is slow," Murphy said. He explained: "We are looking at an absolute trough in activity in February when all sorts of shutdown was extended across the country. Some people thought then that from that low base must come a V-shaped recovery. Of course, things do bounce back. But in most cases, a lot of what we're seeing is that growth is still negative year over year."
However, China's economy is still very dependent on its export markets. With Europe and the US still in lockdown manufacturing export orders were also down 30% in April from the prior year, although the rate of decline had eased a bit from March.
Can China fuel the global economy?
For the first time Chinese workers are experiencing sustained negative wage growth. This dampened consumer demand combined with subdued exports means that China does not appear poised for the type of rapid recovery that would help propel the rest of the world anytime soon.
Murphy expects China to continue in a "cautious ongoing recovery".