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Coronavirus: China’s economy shrank for the first time since 1976 in first quarter
- China’s economy shrank by 6.8 per cent in the first quarter of 2020 after the coronavirus shut down large swathes of the country
- Industrial production, retail sales and fixed asset investment all shrank again in March, showing challenge in restarting the economy
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China’s economy shrank by 6.8 per cent in the first quarter of 2020, the first contraction since the end of the Cultural Revolution in 1976, confirming the economic damage done by the coronavirus pandemic.
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Over the first three months of the year, the world’s second largest economy faced an extensive shutdown as it battled to contain the spread of the coronavirus, and has subsequently struggled to fully reopen.
New data released by the National Bureau of Statistics (NBS) on Friday confirmed the slump, which was worse than predictions of minus 6.0 per cent from a survey of analysts’ forecasts by Bloomberg.
NBS data also showed that over the single month of March the economy remained under huge pressure, with the industrial sectors, retail and fixed asset investment all shrinking again, following a dramatic collapse over the first two months of the year.
Industrial production, a gauge of manufacturing, mining and utilities, fell by 1.1 per cent last month, after a 13.5 per cent decline over January and February, when the data was combined. This was much better than expectations of a 6.2 per cent decline, according to the Bloomberg survey. Within that, however, manufacturing contracted by 10.2 per cent, suggesting that even as factories reopen, headwinds remain.
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