China’s economy shrank by nearly 10%

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SupChina illustration by Derek Zheng

China’s National Bureau of Statistics gave its bleakest-ever data release (in Chinese) last week, showing a Q1 GDP year-on-year contraction of 6.8%. The statistics bureau also breaks down the consecutive changes in China’s GDP size for the past five quarters:

  • Q1 2019: 1.6% expansion
  • Q2 2019: 1.5% expansion
  • Q3 2019: 1.3% expansion
  • Q4 2019: 1.5% expansion
  • Q1 2020: 9.8% contraction

The headline GDP number was “refreshingly honest,” and “suggests Beijing is rethinking its approach to economic guidance,” writes Pete Sweeney in Reuters. Beijing-based economic consultancy Trivium agrees that many of the numbers “pass the smell test,” and comments that if the official year-on-year Q1 GDP contraction had been anything less than 5%, it just wouldn’t have been credible. Trivium’s work resumption tracking indicates that economic activity in China remains stuck at about 83% of capacity.

China’s unemployment problems are still not sufficiently acknowledged, and may continue to get worse this year, the Wall Street Journal suggests (paywall): “[E]conomists estimate as many as 80 million people — roughly twice the population of California — have lost their jobs or not been able to return to work in the past three months, in a working age population of roughly 900 million.”