3 Observations of China’s macroeconomy in Q1 by Dr. Gao Shanwen:
1. Both offline and online consumptions plunged, showing the complexity of consumer behavior amid the pandemic. Even if economic activities are resumed, spending won't fully recover until the virus is eliminated.
2.1. Economic growth rate under the pandemic’s shock slumped by 4 times as much as that back in 2008, while COVID19’s impact on the general price level is only 20% of that of the financial crisis.
2.2. Changes in total demands and supplies and the gap in between worth equal attention in policymaking efforts. It’s unwise to rely too much on aggregate demand management.
3.1. Low-end service providers, SMEs and low-income groups took the worst hits. Transfer payment, while not capable of injecting the maximum stimulus into short-term demands, can help businesses maintain effective social capitals and facilitates employments and economic recovery.
3.2. Compared with #infrastructure programs, transfer payment helps maintain and build up capital stocks without distorting #resourceallocation.
#COVID19 #China #macroeconomy #SMEs #consumption
mp.weixin.qq.com/s/DQxUu0sGjodK…
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