Can China shield its economy from the impact of COVID-19?

Due to the current coronavirus (COVID-19) pandemic and its impact on the global economy, it is unlikely that China will be able to achieve its 2020 growth target. Coface forecasts a growth rate of 4% for the Chinese economy in 2020.

Economic activity in China could decelerate faster than expected this year and miss the Communist Party of China’s (CPC) growth target of 5.6%. In recent months, the Chinese economy has faced multiple headwinds, such as the consequences of the trade war with the United States, as well as structural factors, like the country’s demographic situation (15% of the Chinese population is over 65 years old). In this context, the COVID-19 pandemic is an additional shock that will add significantly to existing challenges.

The aforementioned 5.6% growth target is a key threshold for China and the CPC, with the party considering this a "moderately prosperous" level of society. China defines this goal as a doubling of 2010 nominal per capita income figures. Despite the current circumstances, the CPC is hoping to achieve this objective before its 100^th anniversary in July 2021.