China's new headache–New H1N1 swine flu threat could cripple its economy

Chinese President Xi Jinping could face another tough challenge. After the dreaded Covid-19 pandemic, China’s economy that had started to pick up could once again get dented with the new strain of H1N1 swine flu appearing in the country. While this has the potential to become another health catastrophe, several countries which had resumed trade with China could put a complete stop to inward shipments from the dragon nation.

This time, countries may not even wait for the new disease to scale up before deciding to halt trade with China.

“This will be a big blow for China as countries will take stringent precautionary steps to avoid getting into another health crisis. This will force many more companies with manufacturing facilities in China to look at moving out of the country,” an analyst said on condition of anonymity.

For China—the global supplier of goods—exports have been one of the primary engines for economic growth, even as a study by consultancy firm McKinsey & Company last year revealed that the country has boosted its own domestic consumption. China, which exported 17 per cent of its output in 2007, witnessed an outward shipment of just 9 per cent in 2017. https://www.cnbc.com/2019/07/15/mckinsey-world-has-become-more-exposed-to-china-but-not-the-reverse.html

But the country has been in the middle of a contraction. In the first quarter of 2020, China registered a 6.8 per cent decline—the first time since 1992—the year when it started recording quarterly growth figures. After the Covid-19 pandemic many nations, which were recipients of financial assistance from China, are in no position to repay the debt in time forcing the dragon nation to restructure many of the loans.

China has invested billions of dollars in infrastructure projects like roads, railways, ports and power under its ambitious Belt and Road initiative (BRI) in African and Asian countries.

https://indianarrative.com/world/chinas-debt-to-gdp-ratio-rises-further-to-317-this-year-4085.html

China’s unemployment rate, which was around 4-5 per cent for many years increased to 6 per cent in April. In March it was 5.9 per cent and 6.2 per cent in April. However, it is important to remember that this figure represents only the urban sector. Once the unemployment rate in the rural sector is taken into account, the figure could be significantly higher.

“The problem is that information flow is suppressed and it is difficult to assess the real situation,” D.K. Srivastava, chief policy adviser, EY India, said.

Already many Chinese nationals currently living in the country have evinced interest to relocate, albeit temporarily, to other countries including Thailand and Vietnam. Sources said that many of the Chinese who are working in India too are keen to return here and resume work notwithstanding the current level of tension between the countries in the wake of the Galwan valley clash which left 20 Indian soldiers dead..