World Bank, China's economy may increase 7.9% in 2021

 On September 29, the World Bank released its October 2020 semi-annual report on East Asia and the Pacific: from containment to recovery, with China's economy expected to grow 7.9 percent by 2021.

The report notes that the new crown pneumonia epidemic has had a triple impact on developing economies in the East Asia Pacific region: the pandemic itself, the impact of preventive measures on the economy, and the impact of the crisis on the global economic recession. Rapid action was needed to ensure that the pandemic did not affect economic growth and increase poverty in the coming years.

The report states that some countries have so far effectively curbed the spread of the virus and that domestic economic activity has gradually recovered. But Asia-Pacific economies depend heavily on the rest of the world, and global demand remains weak. The region is expected to grow by only 0.9 percent in 2020, the lowest rate since 1967. China is expected to grow by 2.0% by 2020, with government spending, strong exports and low new infection rates helping. Other countries in the Asia-Pacific region are expected to shrink by 3.5 percent.

The report also said that the Asia-Pacific region's prospects for 2021 are brighter, based on the assumption of sustained recovery and normalization of economic activity in major economies, and linked to the possible availability of vaccines, China is expected to grow by 7.9 percent and other economies in the region by 5.1 percent. However, the output is expected to be well below pre-popular projections over the next two years. The outlook is particularly acute for some of the more exposed Pacific island countries, whose output is expected to be about 10 percent below pre-crisis levels by 2021.

The report predicts that poverty will rise for the first time in 20 years in the Asia-Pacific region: as many as 38 million people are expected to remain poor or return to poverty as a result of the pandemic (according to the upper-middle-income poverty standard of $5.5 per day).

 The World Bank's Vice-President for East Asia and the Pacific, Victoria Kwa, said:" The new crown pneumonia epidemic not only hit the poor the most but also created a group of' new poor'. The Asia-Pacific region faces unprecedented challenges and governments face difficult choices. But there are also sensible policy options available that can reduce these trade-offs, such as investing in better detection and tracking capabilities and continuously expanding social protection to include the poor and the informal sector ."

 The report warns that without simultaneous action on multiple fronts, the pandemic could cut regional growth by one percentage point per year over the next 10 years, with poor households most affected by less access to health, education, employment and financial services.

 A huge fiscal deficit in the Asia-Pacific region by 2020 is projected to increase government debt by an average of 7 percent GDP. The report calls for fiscal reform to mobilize revenue by increasing progressive taxes and reducing wasteful spending. In some countries, the stock of outstanding debt may have reached unsustainable levels, requiring greater external support.

 "Many Asia-Pacific countries have managed to contain the epidemic and provide relief, but efforts are needed to achieve recovery and growth," said Aditya Matu, the World Bank's chief economist for East Asia and the Pacific. Current priorities should be the safe return to human capital; the expansion of a narrow tax base to avoid cuts in public investment; and the reform of protected services to take advantage of emerging digital opportunities ."

China is now facing decoupling from the U.S. economy, a small mold company we can't control. As an export-oriented manufacturing enterprise, all we can do is to improve our ability. When the global trading environment gets warmer, if we are still alive, it is successful.