China's economy may shrink by 10% in the first quarter

Preliminary assessment of Chinese business in March, showed little signs that the economy is recovering from the shock of coronavirus in the first two months of the year, according to CNBC, citing “the Beige book of China” (the China Beige Book).

the Company conducts an independent survey of more than 3,300 Chinese enterprises each quarter. The main indicators for the first quarter fell to its lowest level in nearly 10 years of tracking China’s economy.

“it is Important to note that the results continued to deteriorate until mid-March, when most businesses re-opened and presumably “back to work”, — the report says.

“Not groundless” the assumption that GDP could shrink by 10-11% in the first quarter, even with a small rise in the last few weeks of this month.

the Data “the Beige book of China” for the first quarter showed that in all eight regions of the country and in each sector there was a reduction of the workforce. It is noted that the situation may develop in any direction possible as a “serious reversal” in the second quarter, and the need for much more government intervention.

“the history of the recovery of China is due not only to internal stability, but also by factors independent from Beijing, the report said. — The unprecedented recognition data for the first quarter is more sensitive because China may also have to accept the poor performance for the second quarter in connection with the global weakness. So investors can greatly overestimate the degree of recovery of China and, consequently, the degree to which China can cushion the global downturn”.

the international monetary Fund said yesterday that the pandemic coronavirus this year will cause a global recession, which may be even worse than what was caused by the global financial crisis of 2008-2009.