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China’s recovery from COVID-19 is V-shaped. Who said so?

Gross Domestic Product (GDP) recovery is certainly something tracked by economists with a lot of statistics. As for the statement about China’s economic recovery after the COVID-19, someone has said that it will be a V-shaped one. Who said it? Certainly not me but if you were to ask me, then I will say that China’s central bank certainly have a lot up their sleeves on how to deal with the current situation.

Never ever forget that China is not just the second largest economy in the world but it has the biggest foreign reserves in the world which meant that it has a lot more ways than most countries faced with such a crisis. Let’s listen to two different parties saying almost the same thing about how the Chinese economy will recover right after the end of the COVID-19 crisis. It has been 5 days that the rate of patients recovery is higher than the rate of new admission of patients. I think this is a good sign that things are under control.

Article in thestar.com.my Chen Yulu, a deputy governor at the People’s Bank of China said in an opinion piece in Financial Times dated Feb 20 that the “sound” fundamentals of the domestic economy remain unchanged in the medium to long run despite a short-term slowdown due to the epidemic. He said, “China has sufficient policy space to support steady economic growth. China is one of the few major economies in the world that have maintained normal monetary policy.”

Thus far, China has implemented measures including liquidity injections to the banking system and interest-rate cuts to counter the impact of the outbreak. With President Xi Jinping repeatedly assuring that China will meet its economic goals, financial markets have rebounded. Domestic stocks have restored more than $1 trillion in market value since tumbling in early February. Please do read the full article in thestar.com.my

I know, some may want to say that officials from People’s Bank of China may not be the most objective since it relates to their economy. Okay, here what International Monetary Fund (IMF) said. International Monetary Fund (IMF) Managing Director Kristalina Georgieva said here on Sunday (Feb 23) that she expects China’s economy to “return to normal in the second quarter” of 2020. She said, “The Chinese authorities are working to mitigate the negative impact (of Covid-19) on the economy. In our current baseline scenario, announced policies are implemented and China’s economy would return to normal in the second quarter.” Feel free to read more of her comments here.

Still do not believe that the recovery is likely to be swift and the effects to the world economy will not as bad as what some believe? It’s okay, just remember to take the right actions on what we believe. The good news is that in Malaysia, most of all the COVID-19 infected patients are already discharged. The bad news? In Italy, South Korea, it does seem that the infection is still showing some seriousness. I hope the governments of these countries are learning from all other countries and are taking pro-active measures too. Happy following.

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Next suggested article: How will Wuhan coronavirus affect the world economy?

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Charles Tan The Founder The Writer Kopiandproperty
Charles Tan

Charles is Founder of kopiandproperty.com He writes from his investment experience for the the past 20 years in investments including property, stock, unit trust and more as well as readings and conversations with many property gurus in the industry. kopiandproperty.com is an independent property blog which is not affiliated to any media company, property developer or even real estate agencies.

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