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
What’s going on with extra COVID-19 unemployment benefits?
It’s been weeks since President Donald Trump signed an executive memorandum that was supposed to get the federal government back into the business of topping up unemployment benefits, to $400 a week. Few states, however, are currently paying even part of the benefit that the president promised. And, it looks like, in most states, the maximum additional benefit unemployment recipients will be able to get is $300.
What’s the latest on evictions?
For millions of Americans, things are looking grim. Unemployment is high, and pandemic eviction moratoriums have expired in states across the country. And as many people already know, eviction is something that can haunt a person’s life for years. For instance, getting evicted can make it hard to rent again. And that can lead to spiraling poverty.
Which retailers are requiring that people wear masks when shopping? And how are they enforcing those rules?
Walmart, Target, Lowe’s, CVS, Home Depot, Costco — they all have policies that say shoppers are required to wear a mask. When an employee confronts a customer who refuses, the interaction can spin out of control, so many of these retailers are telling their workers to not enforce these mandates. But, just having them will actually get more people to wear masks.
You can find answers to more questions on unemployment benefits and COVID-19 here.