The Chinese government is working to expand domestic demand in order to promote public consumption. This investment in the public is to be funded by special central and local government bonds, and could be worth as much as 4-5 trillion yuan, or $566-708 billion, for the year. Despite these efforts, China still faces a major problem. Rural Chinese have essentially become an underclass in recent years as the middle class has grown. Restrictive practices dating back to the 1950s, such as welfare systems that tie people’s benefits to their place of birth rather than where they live, inhibit people living in rural China, preventing them from becoming active participants in the Chinese economy. Despite efforts by the government, the Chinese government will not be able to grow until it addresses the problems of the rural underclass. The Chinese economy is dependent on its export and debts it holds for other countries, both of which have become trivial in light of the coronavirus. Now, the International Monetary Fund is saying that the coronavirus pandemic will push the global economy into the worst depression since the Great Depression, with the poorest countries suffering the most. Low-income countries with developing markets across Latin America, Africa, and a lot of Asia are expected to be hit the worst. As one of the biggest economies in the world, China is in a better spot than many other counties, but the country will be hurt by old policies that prevent the lower class from being active participants in the national economy. The effects of this virus will be felt everywhere, and nations with the weakest infrastructures and health care systems are positioned to take the worst hit. It will be scary to watch the economic downfall continue to unfold, and China will likely stay in the spot line due to its global economic power. The inability of China to recover economically from the coronavirus demonstrates that no nation, or person, in the world is immune to the effects of the coronavirus.
“China’s Leaders Focus on Domestic Economy as Global Risks Rise,” Bloomberg News, 8 April 2020, https://www.bloomberg.com/news/articles/2020-04-09/china-s-leaders-focus-on-domestic-economy-as-global-risks-rise
Crutainger, Martin “International Monetary Fund Head Predicts Coronavirus Will Trigger ‘Worst Economic Fallout Since the Great Depression,’” Time, 9 April 2020, https://time.com/5818819/imf-coronavirus-economic-collapse/
Roberts, Dexter, “Don’t Count on China to Lift the Global Economy,” Foreign Affairs, 8 April 2020, https://www.foreignaffairs.com/articles/china/2020-04-08/dont-count-china-lift-global-economy