In a world mired in recession, China manages a V-shaped recovery

ONE SCENE more than any other from China’s coronavirus recovery caught the world’s attention: a giant pool party in August in Wuhan, the city where the pandemic began. Nearly seven months on from the start of their lockdown, revellers were crammed together in waist-high water, jumping and screaming in exhilaration as a DJ spun bass-heavy beats. The video went viral. It was a moment of pure release, and also a marker of how China is far ahead of most other countries in returning to normality (of a sort). Regrettably, economic data are not as exciting as Wuhan’s pool party, but China’s latest GDP figures, released on October 19th, were, roughly speaking, the statistical equivalent of the aquatic festivities.

Officials reported that the economy expanded by 4.9% in the third quarter compared with a year earlier, just shy of its pre-pandemic pace. Whereas most other countries are mired in recession and grappling with a new wave of covid-19 cases, China has just about completed the upward leg of a V-shaped rebound. Analytically, its success is easy to explain. China got one crucial thing right: by almost stamping out the virus, it was able to allow activity to resume with few restrictions. Schools are fully open, factories are humming and restaurants are buzzing. Moreover, China is lucky in one crucial way: it is better insulated from weak global demand than smaller peers such as New Zealand that have also done a good job of containing the pandemic. Until vaccines are rolled out, others will struggle to match China’s feat.