It was the first decline in economic performance since the start of the quarterly statistics in 1992. Nevertheless, German companies active in China are already astonishingly confident about the economic development. VW recently announced that almost all plants in China have resumed production, and German machine manufacturers are now seeing a significant improvement in the situation.
Head of state Xi Jinping (photo) wants to use the corona crisis to demonstrate to the world the superiority of the Chinese system. Xi has therefore ordered the economy to restart as quickly as possible. However, an early return to the usual growth path is by no means certain. A second wave of corona could bring the hoped-for upswing to an abrupt end. There is also a lack of demand from abroad. For the rest of the world, China should definitely become a lesson for its own easing policy and the scope that the virus leaves behind.
The official Chinese statistics on infection numbers and economic performance should be treated with caution. The economic slump gnaws at the legitimacy of Xi’s rule. The corona crisis is estimated to cost nearly 30 million Chinese people the job. That could stir up unrest even among the tolerant Chinese. China’s leadership fears nothing more than a return of the virus.
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