Evaluating the Impact of the COVID-19 Pandemic on the Chinese Economy

This report assesses the impact of the COVID-19 pandemic on the Chinese economy, covering aspects such as GDP decline, unemployment, recession, and disruptions in the circular flow of income. It examines the economic conditions in China before and during the pandemic, highlighting the initial contraction followed by a recovery. The report also analyzes various economic measures like national income, cost of living, and inflation, supported by relevant data and charts. Furthermore, it discusses the Chinese government's policy responses, including labor policies, fiscal measures, and interventions by the People's Bank of China, aimed at mitigating the economic fallout from the pandemic. The report concludes by summarizing the overall impact and the measures taken to address the economic challenges.

INTRODUCTION TO
ECONOMICS

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
The economics is the area which is concern with consumption, distribution and
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 intensive led to lower paid lobar, social and 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.

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 quarter their 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.
Illustration 1: 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.
Illustration 2: 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.
Illustration 3: Circular flow of income in china
Source: flow of income, 2020

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
domestic production of the country. The jobs opportunities are fewer people are more
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.

REFERENCES
Books and Journals
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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
of life among local residents in Liaoning Province, China: A cross-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
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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
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He, A.J., Shi, Y. and Liu, H., 2020. Crisis governance, Chinese style: distinctive features of
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Chen, T. and et. al., 2020. A policy category analysis model for tourism promotion in china
during the COVID-19 pandemic based on data mining and binary regression. Risk
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