COVID-19 Impact on Chinese Economy: Measures of Economic Activities and Policies
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This report evaluates the COVID-19 impact on the Chinese economy with the number of concept including the unemployment, recession and circular flow of income that is happened at that time. Further, in this economy activities are determined that are influencing the cost of living.
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INTRODUCTION TO ECONOMICS
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TABLE OF CONTENTS INTRODUCTION...........................................................................................................................3 MAIN BODY...................................................................................................................................3 Economic condition of china in the pandemic period.................................................................3 Difference measures of economic activities...............................................................................4 Policies........................................................................................................................................9 CONCLUSION..............................................................................................................................10 REFERENCES..............................................................................................................................11
INTRODUCTION Theeconomicsistheareawhichisconcernwithconsumption,distributionand production of commodities. In this the government, individual, business are choice to allocate its resources. As the COVID-19 Pandemic is impact on the economic situation of all the nation and the china is also influenced at that time and their GDP is also tended to diminished (Polasky and et. al., 2019). This report will evaluate the COVID-19 impact on the Chinese economy with the number of concept including the unemployment, recession and circular flow of income that is happened at that time. Further, in this economy activities are determined that are influencing the cost of living. The different theories are being used and problem solving economic policies are discussed. Moreover, the impact of pandemic on macroeconomics is being argued by using applicable theories. MAIN BODY Economic condition of china in the pandemic period The China has reform its over all economy in the year of 1978 and in every year after that they are having growth of around 10 percentage (Brodeur and et. al., 2020). There are around 800 million population who have come out from the poverty and also improve the health, education and many other factors as well. Before the pandemic happened in china they are high growth country who is resource intensiveled to lower paid lobar, socialand economic imbalances. In the year 2019 the economy of china has predicted to show a rapid upward trend the capital GDP reached till 70892 yuan, this represents the growth rate of 6.1 percent which is adding tertiary industry. According to this the China government is predicting the GDP of China for 2020. In the first half year the economic is contracted up to 1.6 percent this also underscoring the wide impacts due to virus which was emerged in the China when the COVID-19 introduce in the Chinese economy which is in last year. The people are continuously infected with this virus an almost 583000 people are being die all over the world due to this pandemic situation. The people have loss their jobs and there are not even have money to live their lives. Further China economy return to growth in the second quarter after and lowest economy condition yet there are lost of unexpected domestic consumption and the policies are also developed by China. This step is to be taken to recover the pandemic period of Covid-19.
The bounce in the economy still being weakest in expansion for record which reduces to 6.8 percentage in the first quarter which is the worst economy condition then early 1990s. Further the economy control itself and infection of Covid-19 is being allowed to re boost the economy and investment. Further in 2020 when the financial statement are closed it has been identified that world second large economy report to have GDP increase which is 2.1 percent in the year of 2020. China got influenced with the world which lots of change as the health of the citizen its totally damaged at that time many people had died (Candela and Geloso, 2018). The expansion and contraction is being influenced up to 50 percent and it also go lesser than this which show the economy of the China is diminishing. The economy is fully going towards recession which is bad sign for the country growth. China the people are not allowed to go outside and lock-down also announced by the government and the transportation is blocked. Difference measures of economic activities As the economy is influenced by the pandemic period so the GDP is highly impacted by this as flow of money is highly reduced and the economy is not remained the same. The following element are helpful in knowing the impact of uncertainty of Covid-19 (Wang and et. al., 2020). Nation income: The gross national income is the collection of amount which is earned by the nation's people as well as the businesses in the nation. It assists to measure and calculate the wealth of the nation in every year. This is the total of the nation gross domestic product and add income that they receive from abroad.
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According to the above figure it can be clearly identified that the China economy is also reduced from the first quarter where economy is having its worst condition yet the Covid-19 is firstly impact the Chinese market and further explored all over the world (Xiang and et. al., 2020). In the first quartertheir nation income reduces widely and then when the rest of the world got infected by the Covid-19 the graph shows 2020 is the year when the economic condition of the China is horrible and then slowly the economy control themselves. Then they control the infection of the Covid-19 in the nation and then in the quarter second they again raise the economic condition. When the nation's income is compared to other world countries it is identified that the China has recovered from the pandemic very fast, and they also enhance the economy then the previously they have. Cost of living: This is a cost which will help to maintain the standard of living, the index of cost of living are operationalized in the change in the cost. Cost of living is the maintenance cost of living which helps in certain standardize. China is infected its cost of living in the pandemic period because they are not having the jobs as well as money. Illustration1: world GDP and China GDP Source: China's economy, 2021
Inflation: This is the rate in which price over a particular period, this is a particular measure which include increasing in price with this the cost of living also tends to increase (Zhang and Ma, 2020). From the given chart it is identified that the China is influenced highly as the inflation rate of china is being 2.5 percent when it compares to last year. The inflation rate of china is being calculated with consumer price index for china which use to predefine the products range of the commodities that are being consumed by the customers though tout the year (Ye, Zhou and Wu, 2020). When the chart is looked it has been founded that the year 2019 the economy is having inflation rate of 2.9 percent and further in the nest year it come at 2.5 yet the economy is try to reduce the rate but the pandemic has slower the process and very slight difference happens. But when the economy is growing again then the inflation rate tends to diminish and the cost of production also reduced. Illustration2: Inflation rate in china Source: Economics and politics, 2021
Circular flow of income in china The circular flow of income get influence in china due to pandemic period of covid-19. This flow movement is automatic and when there is no movement in this circular then the respective agents can not able to interact with each other (Li, Hallsworth and Coca‐Stefaniak, 2020). It is totally disturbed due to COVID-19. As the pandemic have completely impact on the following area in the china and create hurdle in the economy growth. Flow of people: The people can not able to visit in any other area so the travel, airlines, tourism, live shows, gym, saloons, and many other things remain stopped due to the pandemic period of COVID-19. Just because of pandemic, people prefer to stay at home, instead of going out and planning for vacation. Illustration3: Circular flow of income in china Source: flow of income, 2020
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Flow of information: There is not much information is to shared and their no incidence which is happening expect the pandemic of COVID-19. So in this the call, text, news, documentation are having very limited information so the flow of information also get minimized (He, Shi and Liu, 2020). Decreasing number of goods sales: The people in china are not supposed to come out from their house expect any emergency which is influenced the shopping, retail, manufacturing, food and many more areas to be under utilized and their flow become more compact and limited. Due to unemployment, people are not being able to spend money in the context of luxury product and services that they have been used earlier. As they may able to buy low cost items, and make adjustment in their needs, which is not that easy for them, but according to situation they respond in such manner. Flow of money: Many people are also lost their jobs, and they are not having money to invest money in the lending, stocks, bonds or any other type of bonds. Unemployment The pandemic period also influence the unemployment rate because many sectors are remained closed in this phase and there is no work to do as per the government guidelines. The economic is highly influenced as the people are jobless. Due to pandemic, many individuals are jobless as outcome of Lock down. The unemployment become the priorities issue in the economy and money supply is also reduces as all the sector are remained closed for long term in the pandemic situation. Recession The economic activity are being declined in the China this is being reduced in the gross domesticproductionofthecountry.Thejobsopportunitiesarefewerpeoplearemore unemployed and having not much money that they can buy their needs. All the businesses in the economy are also not growing in china. The worst economy condition in the year of 2020, for this the government of china had developed different policies that will help to overcome from these issues.
Policies Lobar policy: For the effectiveness of economy of China has enabled the labour to the standardized level of compensations of improving their levels. In addition to this the labour are paid minimum wages that are satisfactory for them. The survey for the labour in the china shows that 5.1 % in the urban area. In this the ministry of china also said the compensation of worker would subsidize for every people who are infected by the Covid-19 (Chen and et. al., 2020). Fiscal policy: The government of China have used for any uncertainty responses which also include emergency health related services to the needed people. In this they are established testing labs and arranging the need wards and enhancing their care facilities and further the procurement of medicines and make available all the medicine. The government has made use of 2.2% of over all GDP to tackle the COVID-19 pandemic in the year of 2020. The government of China allotted 10.9billion from which 2.6 billion are used to build more hospitals and clinics to handle the impact of Covid on people. The social package are being 14.7 billion from which 2 billion are spent on the bread's distribution campaign. The people who are involved in the agriculture are also supported with the fund of 5.2 billion. People bank of china: They have launched a public market backward repurchase commercial activity in this they are trying to maintain the liquidity related to banking system to deal and make prevention and control measures (Polasky and et. al., 2019). They also reduce their interest rate so that the people can take the loan when they want. Deferred tax payment: In the pandemic situation when the time period to pay the payment is expired then also tax can be paid within the 15 next days. Their will be no extra charges are being charged. In this the due date of the goods that are being imported the date of charge is remained postponed to the work resumption date (Brodeur and et. al., 2020).
CONCLUSION This report concludes that the economic is the branch which help to know about the product, consumption and distribution of products and services within economics. The COVID- 19 has impact the chines market very crucially because the economy condition is being very bad people are not having jobs and money to invest. The circular flow of income is totally impact, whole country people become jobless. The government of china had taken steps by making policies like fiscal, labour policies in the pandemic situation or tackle pandemic.
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REFERENCES Books and Journals Polasky, S. and et. al., 2019. Role of economics in analyzing the environment and sustainable development.Proceedings of the National Academy of Sciences.116(12). pp.5233-5238. Brodeur, A. and et. al., 2020. A literature review of the economics of COVID‐19.Journal of Economic Surveys. Candela, R.A. and Geloso, V.J., 2018. The lightship in economics.Public Choice. 176(3), pp.479-506. Wang, J. and et. al., 2020. Acceptance of COVID-19 Vaccination during the COVID-19 Pandemic in China.Vaccines.8(3). p.482. Xiang, D. and et. al., 2020. Management and outcomes of patients with STEMI during the COVID-19 pandemic in China.Journal of the American College of Cardiology.76(11). pp.1318-1324. Zhang, Y. and Ma, Z.F., 2020. Impact of the COVID-19 pandemic on mental health and quality oflifeamonglocalresidentsinLiaoningProvince,China:Across-sectional study.International journal of environmental research and public health,17(7). p.2381. Ye, Q., Zhou, J. and Wu, H., 2020. Using information technology to manage the COVID-19 pandemic:developmentofatechnicalframeworkbasedonpracticalexperiencein China.JMIR medical informatics.8(6). p.e19515. Li, J., Hallsworth, A.G. and Coca‐Stefaniak, J.A., 2020. Changing grocery shopping behaviours among Chinese consumers at the outset of the COVID‐19 outbreak.Tijdschrift voor economische en sociale geografie.111(3). pp.574-583. He, A.J., Shi, Y. and Liu, H., 2020. Crisis governance, Chinese style: distinctive features of China’s response to the Covid-19 pandemic.Policy design and practice.3(3). pp.242-258. Chen, T. and et. al., 2020. A policy category analysis model for tourism promotion in china duringtheCOVID-19pandemicbasedondataminingandbinaryregression.Risk Management and Healthcare Policy.13. p.3211.