As much of the world struggles to contain the coronavirus, China's recovery is
gaining momentum, positioning it to further close its gap with the US economy,
according to an article, 'China's Economy, Bouncing Back, Gains on the US,'
published on The Wall Street Journal on Tuesday.
According to the
article, China is the only major economy expected to grow this year. JP Morgan
recently boosted its 2020 China growth forecast to 2.5 percent from 1.3 percent
in April. Economists at the World Bank and elsewhere have also upgraded their
forecasts for China.
China, the world's second-largest economy in real
GDP terms, has slowly been catching up on the United States. Economists say
China's quick rebound from COVID-19 will accelerate that process, the article
said.
Homi Kharas, a senior global economics and development fellow at
the Brookings Institution, said the coronavirus puts China's economy on track to
reach parity with the US in 2028 in absolute terms, using current dollars, two
years faster than his pre-coronavirus estimate, according to the
article.
'China will emerge even stronger as the largest economy in the
developing world,' the article quoted Kharas as saying.
According to the
article, China's factories were among the world's first to reopen in April,
which helped China grab market share in global trade.
Companies from
Marriott International Inc to Starbucks Corp reported strong second-quarter
growth in China, as the rest of the world pulled back.
The article added
that before the coronavirus, Deutsche Bank estimated China's economy would grow
by roughly 26 percent between 2019 and 2023, versus 8.5 percent for the United
States over the same period. Now, taking into account the impact of the
pandemic, the bank expects China's economic expansion to moderate slightly to 24
percent between 2019 and 2023, while the US over that stretch will have grown by
3.9 percent - less than half the original projection.
Yet, China still
faces headwinds. It counts on exports for roughly one-fifth of its economic
output, making it reliant on customers in the US and Europe overcoming the
virus. It must also prevent its own resurgence in COVID-19 cases, the article
said.