Corona Cause China’s Economy Crisis Beyond 1994 Recession

The People’s Bank of China (PBoC) will channel funds reaching 400 billion yuan or US $ 56.3 billion. Equivalent to Rp923.32 trillion (based on the exchange rate of Rp16,400 per US dollar) to small banks in their countries. The funds will be used to help bank liquidity amid the spread of the corona virus or Covid-19 pandemic.

PBoC discloses additional liquidity to banks obtained through reducing the bank’s cash reserve limit at PBoC. The plan, China’s central bank will cut the cash reserve limit by 100 basis points (bps) in two stages.

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China’s economy began to show stretches after being rocked by the corona virus pandemic. However, the steps of the Bamboo Curtain country are still long in the midst of the current uncertainty.

China’s GDP growth has the potential to shrink to one to two percent, falling from 2019 growth at 6.1 percent. Launch CNN, Wednesday (1/4), analysts including the World Bank predicted, the Chinese economy this year could not grow at all in the worst scenario.

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In fact, the Chinese government which has set GDP targets every year since 1985, is hesitant in setting targets. A policymaker at the Central Bank of China (PBOC) advised the Xi Jin Ping government not to set targets in 2020.

“This is a very difficult situation to realize growth at 4 to 5 percent. Many observers predict growth will plunge to 1 to 2 percent. Any possibility can happen,” said Central Bank of China monetary policy committee member Ma Jun.

Economic Impacts Due to Corona Predicted to Surpass the 2008 Crisis

The country with the second largest economy in the world had imposed a halt to industrial activity due to the corona pandemic.

Based on Johns Hopkins University data, positive cases of the corona virus in China have slowed with accumulations reaching 82,509 cases on Friday (3/4).

Of that number, 76,760 people recovered and 3,326 people died, so the death ratio due to the corona virus in China was 4.03 percent.