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Observations on Chinese GDP growth and Covid-19

AEI 2020.02.28
페이스북
This is highly speculative. Worse, it seems contradictory ― things are terrible, yet not that bad. The terrible part is that Chinese GDP growth will be sharply negative for the first quarter, Beijing’s protests aside. The not-so-bad part: Current GDP is not very important. In the first quarter, China’s economy is typically driven by consumption. In 2019, the National Bureau of Statistics (NBS) claimed consumption generated 65 percent of first-quarter GDP growth, the highest for the year. The Lunar New Year holiday means less time working and more time travelling and consuming. China’s benchmark consumption measure is retail sales. The problem: Retail sales overlap with but are not the same as the consumption component of GDP. Sales and fixed investment are noted by the government as misleading with regard to GDP, never mind that they are publicized to show economic progress while GDP components are not.

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