China Reports First Quarterly GDP Shrinkage In Decades Due To COVID-19

Official data released by the Chinese government showed that the world's second-largest economy shrank 6.8 percent in January-March 2020 from the same period a year ago.

It is China's first such decline since at least 1992 when quarterly gross domestic product (GDP) records began, as the COIVD-19 pandemic forced a shut down of most of the country's operations for weeks.

China had to make significant efforts to contain the spread of the coronavirus which first emerged in the country in late December 2019, including shutting down factories, transport and shopping malls.

Similar shutdowns are currently effective in major economies around the world crippling global trade.

On a quarter-on-quarter basis, GDP fell 9.8 percent in the first three months of 2020, the National Bureau of Statistics said, which compared with 1.5 percent growth in the previous quarter.

An immediate recovery in China's economy is far from sight even as it lifts lockdown on Wuhan, where the disease was first reported, after a significant fall in the number of locally transmitted cases of COVID-19. The country now accounts for only 4 percent of the total cases reported worldwide.

China's NBS also reported other key economic data, which look equally disheartening. Its retail sales decreased by 15.8 percent in March when compared to the same month a year ago, after having declined by 20.5 percent for January and February.

Fixed-asset investment outside rural households, that indicates construction activity, and industrial output, an important indicator for China's economic performance, continued to decline at 1.1 percent in March after falling 16.1 percent on a year-on-year basis, in the previous two months.