China’s economy rebounds from COVID-19, growing 3.2% in the second quarter
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China reports that its economy grew 3.2% in the second quarter from the same time last year. That makes it the first major economy to rebound since COVID-19 hit.
For comparison, China’s economy shrank 6.8% in the first quarter. Marketplace China correspondent Jennifer Pak has more on this from Shanghai. The follow is an edited transcript of her conversation with Marketplace’s Sabri Ben-Achour.
Sabri Ben-Achour: So what does an economic rebound look like on the streets of Shanghai?
Jennifer Pak: On the surface, it looks like everything is back to normal, except most people are still wearing face masks. Popular shops and restaurants — those that are still open that is — are full on weekends, but I’m starting to see a number of small shops posting signs, looking for someone to take over their lease. So times are a bit tough.
Ben-Achour: And 3.2% year over year, that’s a big turnaround from the almost 7% contraction in the first quarter alone. How did China manage that?
Pak: Well, it’s partly due to the authorities being quite aggressive about containing the coronavirus — of course, after initially dragging their feet. They went from sealing off whole cities and provinces with high infection rates to now doing widespread testing and tracing. For example, there was an outbreak recently in Beijing, and that’s what they did. So now what we’re seeing are road construction projects, factories churning out more products. But there isn’t that much demand for that stuff, especially in the U.S. or Europe. So millions of people are out of work. Officials say unemployment for June still hovers close to 6%.
Ben-Achour: Well, 6% is far better than double-digit unemployment rates in the U.S. Does this mean that the U.S. and the rest of the world could rely on Chinese consumers?
Pak: Maybe not. That unemployment figure it doesn’t really account for millions of workers from the countryside who are in the cities and jobless. And, unlike the U.S., China’s government has not been giving cash handouts to its citizens. People are watching what they spend, so retail sales remain fairly weak, falling 1.8% last month compared to a year earlier.
COVID-19 Economy FAQs
Millions of Americans are unemployed, but businesses say they are having trouble hiring. Why?
This economic crisis is unusual compared to traditional recessions, according to Daniel Zhao, senior economist with Glassdoor. “Many workers are still sitting out of the labor force because of health concerns or child care needs, and that makes it tough to find workers regardless of what you’re doing with wages or benefits,” Zhao said. “An extra dollar an hour isn’t going to make a cashier with preexisting conditions feel that it’s safe to return to work.” This can be seen in the restaurant industry: Some workers have quit or are reluctant to apply because of COVID-19 concerns, low pay, meager benefits and the stress that comes with a fast-paced, demanding job. Restaurants have been willing to offer signing bonuses and temporary wage increases. One McDonald’s is even paying people $50 just to interview.
Could waiving patents increase the global supply of COVID-19 vaccines?
India and South Africa have introduced a proposal to temporarily suspend patents on COVID-19 vaccines. Backers of the plan say it would increase the supply of vaccines around the world by allowing more countries to produce them. Skeptics say it’s not that simple. There’s now enough supply in the U.S that any adult who wants a shot should be able to get one soon. That reality is years away for most other countries. More than 100 countries have backed the proposal to temporarily waive COVID-19 vaccine patents. The U.S isn’t one of them, but the White House has said it’s considering the idea.
Can businesses deny you entry if you don’t have a vaccine passport?
As more Americans get vaccinated against COVID-19 and the economy continues reopening, some businesses are requiring proof of vaccination to enter their premises. The concept of a vaccine passport has raised ethical questions about data privacy and potential discrimination against the unvaccinated. However, legal experts say businesses have the right to deny entrance to those who can’t show proof.
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