China’s economy set to make stellar rebound in 2020
Published: Aug 03, 2020 06:37 PM

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The Caixin China General Manufacturing Purchasing Managers' Index (PMI) rose to 52.8 in July, hitting its highest point since February 2011. The number demonstrates the stellar rebound in China's economy since the national lockdown to contain the COVID-19 epidemic was lifted in April. 

Boosted by the positive data, China's stock market rallied about 2 percent on Monday, seeing a massive turnover of 1.3 trillion yuan ($186.36 billion). Supported by a plethora of positive data, including 3.2 percent GDP growth from April to June and the yuan's steady value gain, the equity market is likely to keep rising. 

The most reassuring thing for Chinese people at this time is that China, with strong central leadership, has brought COVID-19 firmly under control. Unlike the governments of the US, India and a handful of other countries, Beijing always places the health of the people before other metrics. 

A nationwide shutdown following the abrupt coronavirus outbreak in Wuhan has paid off, though the lockdown decimated China's economic growth in the first quarter. China no longer fears sporadic outbreaks as we have accumulated rich experience on how to bring them under control - whenever and wherever they occur. 

And we have gained ample confidence in achieving a higher growth rate in the second half of 2020. To hit that goal, China's governments at all levels should continue to support medium and small-sized businesses by reducing taxes and fees, and issuing more vouchers to consumers, alongside other policies to incentivize domestic spending. 

Additionally, as the majority of China's neighboring economies have done well containing the virus, we could rack up efforts to reopen cross-border air and train services with these countries, to quickly reinvigorate trade and personnel exchanges. 

Boosted by the government's strong stimulus spending on technology and new infrastructure projects, China's economy will welcome a bigger surge on the back of positive second-quarter growth. China will be able to achieve a yearly growth of at least 2.5 percent this year. 

Increased investment on high and new technologies will also set a solid foundation for China's sustainable development and pave the way for the country to blunt the US government's "decoupling" attempt.