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A battle won

This growth has come even as other major economies are projected to suffer stunning contractions ~ the United States by 5.9 per cent; Japan by 5.2 per cent; United Kingdom by 6.5 per cent; Germany by 7 per cent; France by 7.2 per cent; Italy by 9.1 per cent; Spain by 8 per cent and India by 4.5 per cent.

Statesman News Service | New Delhi |

Amid a global economic slump following the coronavirus epidemic, doubtless the biggest economic story to have emerged so far this year is that China’s economy has bounced back in the second quarter. After a record contraction of 6.8 per cent in the first quarter of the year, China’s Gross Domestic Product has recorded a stunning growth of 3.2 per cent in the second, as reported this week.

This growth has come even as other major economies are projected to suffer stunning contractions ~ the United States by 5.9 per cent; Japan by 5.2 per cent; United Kingdom by 6.5 per cent; Germany by 7 per cent; France by 7.2 per cent; Italy by 9.1 per cent; Spain by 8 per cent and India by 4.5 per cent.

Quite amazingly, China’s goods trade surplus widened to $154.7 billion in the second quarter, significantly higher than the $104.4 billion in the same period last year. The irony implicit in this trade growth is startling, if the reasons cited for it are considered.

According to analysts, trade grew because of three factors ~ strong demand for Chinese medical equipment because of the pandemic, increased trade linkages with Asean and still resilient exports to the United States, partially driven by front-loading activities in anticipation of the deteriorating ties between the two countries.

In effect, a virus that originated in China and for which many in the world blame the Communist nation has proved to be a major factor in its economic recovery, because of the increasing demand for medical equipment. India, locked in a territorial dispute with China and witness to jingoistic calls for boycotting Chinese goods, has itself been importing Chinese Covid test kits, thermometers and PPE kits by the planeload.

In short, every time a public health official exhorts India to test more, someone in China enjoys a quiet chuckle. Second, the Asean region that has felt strategically suffocated by China because of territorial disputes between Beijing and many of its member countries, has in fact increased trade linkages in the past quarter.

And the US which has been locked in an unreconciled spat with China from before the virus outbreak has been an apparently unintentional benefactor, even if it is in the short term, as American importers buy more than they need fearing a breakdown in ties.

Thus, while China has ramped up its disputes with nations around the world, it has managed by an amazing sleight of hand to convince even these nations that it remains aggressively open to business. And it will not be stopping any time soon. For while a lot of the rebound has been driven by factory output and exports, Beijing is said to be looking aggressively at more infrastructure construction and domestic consumption to buoy the economy.

The country, for instance, is aggressively promoting domestic tourism to ensure that money lying unspent with households is utilised on holidays. With international travel still restricted, the Chinese tourist is being encouraged to spend his yuan on discovering the country apparently at bargain prices. As Sun Tzu said, the supreme art of war is to subdue the enemy without fighting.