China’s response to the coronavirus pandemic has been impressive, an International Monetary Fund official told CNBC on Tuesday, adding that it had once again managed to do well when faced with a major crisis.
The Chinese economy managed to end 2020 — the year in which the coronavirus pandemic brought most of the global economy to a halt — in positive territory.
Its GDP (gross domestic product) came in at 2.3% last year and is expected to expand by 8.4% by the end of 2021, according to the IMF. This means that China’s economy has not been as severely hit by the Covid-induced shock as much of the rest of the world.
“China is really an impressive example of an outlier in the positive sense,” Tobias Adrian, director of the IMF’s monetary and capital markets department, told CNBC’s Joumanna Bercetche Tuesday.
“They have cracked down on the pandemic very aggressively, very early and the economy really already came back to normal levels at the middle of last year, so way ahead of any country in the world.”
The first cases of Covid-19 were reported in China in late 2019. Though the virus quickly spread across the world, China’s aggressive stance in containing the virus at the start of 2020 enabled it to better control waves of new cases. Its measures included travel restrictions, strict lockdowns and a very fast rollout of health facilities.
“In China, the kind of measures that can be taken to contain the pandemic, you know, are somewhat more intrusive than in some countries and that has really helped in this circumstance. So for the second time now with a major crisis, China has fared very well,” Adrian said, drawing a comparison with the global financial crisis of 2008.
At the time, China deployed vast amounts of monetary and fiscal stimulus, which prevented a deeper shock from the financial crisis, and also provided important support to neighboring countries in Asia.
“While it is certainly true that on the one hand, you know, leverage has also risen in China, for example in the corporate sector, and some of the smaller and provincial banks certainly have some risk on their balance sheet, overall, of course, the economic strength is a fantastic help for companies and innovation continues,” Adrian added.