You know that…
China is the origin of the deadly Corona Virus ( COVID -19) and also the first country to resume its business activity. The novel virus (earlier not detected in humans), spread around the world, and put more than 100 countries under full or partial lockdown. And the question comes whether this may bring a global recession?
To answer this we analyzed, the contribution of global leaders China and the US to the growth of the world economy
China and the US are the largest economies of the world and due to the outbreak of coronavirus, if it slows down, the world economy will also have to bear the brunt.
Up to 1990, the US economy was treated as the engine of the world economy. But later on, it doesn’t remain large enough and also not growing fast enough to keep pace with the speed of the world economy. And China emerged as the largest and fastest-growing economy and replaced the US to became the engine of the global economy. And that is the main reason why the US imposing tax levies on imports from China.
According to the International Monetary Fund, from 2013 to 18 China contributed 28% to the global economic growth, which is more than twice the share of the USA. Along with the growth of China, Singapore, Japan, South Korea, and other small economies also benefited. It means that global growth can not be accelerated without contribution from the Chinese economy.
Then, How much global economy depends on China?
- As per the Mckinsey report, Since 2013 China has been the world’s largest goods trading nation. 110 fortune five hundred companies are from China, which generates 80% of their revenue from the Chinese market itself.
- China is the largest emitter of greenhouse gases ( like carbon dioxide), and its air and water pollution affects other countries also. However, 45% of global renewable investment is made by China.
- China also remained one of the largest destinations for inbound and outbound foreign direct investment
- China is the world’s largest exporter by value. It is also a second-largest market after the USA, available for export. As there is a large segment of the middle class in China, it offers a lucrative market to the world for export. As per the Mckinsey report, China is the largest export destination for 33 countries and the largest source of imports for 65 countries.
- There are more than 800million internet users in China
- China is the largest producer as well as a dominating exporter of solar equipment
- China’s outbound tourism is an important source of tourism revenue for the EU.
These are some of the reasons which show, how important the Chinese economy for the growth of the global economy. And if it slows down due to COVID19, the world economy may also face slow down.
We hope the world comes out of this COVID2019 scare as soon as possible…
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