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Huang Yiping:Economists at US-China panel see gradual recovery of global economy


The global economy is facing a long recovery from the novel coronavirus pandemic, according to economists from China and the US, with one saying the crisis "is going to have a long, dark tail".

The economists shared their analysis and projections on the economic implications of COVID-19 during a virtual panel discussion Wednesday titled "Coronavirus Crisis: The Short and Long-Term Economic Impact in China and the United States", which was sponsored by the National Committee on US-China Relations.

Mark Zandi, chief economist of Moody's Analytics, said he isn't optimistic about a strong economic recovery.

"It's not going to be V-shaped," he said. "There's just the uncertainty around the trajectory of the virus. I wouldn't be surprised if we see some parts of the country re-shut down."

Zandi said he can't see businesses investing to any significant degree because of the possible threat of a second wave of the virus causing new shutdowns.

"It's going to take a long time to recover from this fully. This COVID crisis is going to have a long, dark tail," he added.

Huang Yiping, professor of economics and deputy dean of the National School of Development at Peking University, told the panel that given that the virus is still spreading around the world, the Chinese government is gradually restarting businesses and initiating relief measures to help companies and households make it through the difficult period.

He agreed with the other panelists that a global economic recovery will be very gradual after the pandemic.

Huang said that even though the virus is under control in China, many companies in coastal cities are facing mass unemployment because their export orders have been canceled.

He said that if the pandemic is not globally controlled, exports from China will remain weak, and it will take a longer time for recovery. Huang called on the government to do more to stimulate investment.

Huang said a global recovery might actually be led by Chinese consumers.

"Retail sales in China (are) already as large as in the US, even though the consumer spending might still be relatively slower in terms of growth. But globally, that might be the bright spot in the second half of this year or even maybe next year," he said.

Without the lifting of widespread lockdown measures, the global economy can't work properly, said Gao Shanwen, chief economist of Essence Securities Co Ltd and independent director of China Pacific Insurance Co Ltd.

Gao said the consumption recovery in China so far is slow but steady and "may go on for a very long time until a new balance is reached".

Gao said that during the past few years, employment in the secondary sector in China has been steadily shrinking, reflecting the ongoing restructuring and upgrading of manufacturing industries.

"As a result, all newly created jobs are in the service sector, (and those jobs) are badly affected by the outbreak of COVID-19," he said.

Catherine Mann, global chief economist at Citibank, said "we're looking at a global contraction that is the greatest since the Great Depression".

She said a recovery may take 12 to 18 months, and "all that time is way too long for the current fiscal packages in place to continue to be implemented".

Mann pointed out that economists look to China as a template for data.

"To watch how manufacturing is changing, industrial production is changing, and to watch what is happening to discretionary consumer behavior, that is a very important indicator of what is on the horizon for the US economy, for the European economies and, therefore, for the global economy," Mann said.

By HONG XIAO in New York | China Daily Global