Don’t Count on China to Spur Global GDP Growth

Once upon a time, China’s economy could routinely crank out 12% to 15% annual growth, enough to add up to 2.5 percentage points to growth in global gross domestic product. Some people hope for that to happen now, as China’s economy reopens after two years of Covid-containment policies.

Whether examined from the perspective of capital or labor, the case for China to “rebound” from 2% GDP growth currently to a rate strong enough to boost global growth and commodity prices isn’t supported by the math. Any “pivot” in China’s GDP growth is unlikely to start much before year end, anyway. No country has rebounded from a Covid outbreak in less than a year. When China’s economy does rebound, growth is more likely to disappoint optimists than to amaze them.