[Global Times Comprehensive Report] The spread of the new crown pneumonia epidemic has braked the growth of the global economy. The World Bank warned on Tuesday that the epidemic could put millions in the Asia-Pacific region into poverty; several German subsidiaries of the well-known fashion brand Esprit have gone bankrupt, and the popular American Football Association in the United States also announced its application for bankruptcy on Tuesday; Macy's Most of the 125,000 employees will face unemployment this week, while 2,000 elephants serving Thailand's tourism industry will also be forced to “lay off”. In China, where the local epidemic was under initial control, March 31 ushered in the good news of a strong rebound in the manufacturing purchasing manager index (PMI). Even so, the enthusiasm of the public for spending is still far behind the speed of resuming work. As governments continue to "copter save money" programs, fears of inflation have grown. And as the famous American economist Stephen Roach said: "The best way to restart the global growth engine is to flatten the growth curve of the new crown virus infection in various countries and the world."
Overseas epidemic affects resumption of work in China
Data released by the National Bureau of Statistics of China and the Federation of Logistics and Purchasing on Tuesday showed that the official PMI in March was 52, a strong rebound from the previous value, and much higher than the 45 predicted by economists surveyed by Reuters. The official PMI for February was 35.7, the lowest on record.
"The Wall Street Journal" said that this shows that Chinese companies have resumed work and resumed production significantly. Reuters also said that this showed that the frozen state of the economy began to melt in February, but the resumption of work and production has not yet returned to normal levels before the epidemic. In addition, the accelerated spread of overseas epidemics has increased the risk of a global economic recession, and the second shock to the Chinese economy cannot be accurately estimated. In March, China's new export orders and import indexes were at low levels, and policy overweight support was still needed.
In fact, China has recently introduced policies to stimulate economic growth. On March 31, Wang Daoshu, the chief auditor of the State Administration of Taxation, introduced at a press conference that from January to February this year, the country's tax and fee reductions totaled 402.7 billion yuan. On Monday, Xin Guobin, deputy minister of China's Ministry of Industry and Information Technology, said that the overall operating rate of auto companies has increased to 97%, but due to insufficient market demand, the government is considering measures to stimulate car sales. The People's Bank of China also sharply cut interest rates on bank loans on Monday, injecting 50 billion yuan into the financial system through reverse repurchases to help the economy deal with the impact of the epidemic.
"The hotel and tourism business is far from truly recovering." The British Financial Times reported on March 31 that many restaurants and small businesses in China were still closed more than two months after the outbreak. Chen Shaohui, the chief financial officer of Meituan, a leader in Chinese food delivery services, said that in the first quarter of this year, sales of all Meituan's business lines will shrink: "On the demand side, more and more businesses are gradually returning to business. But Consumers are still the first to worry about the health risks of person-to-person contact in restaurants, which makes the entire recovery process more complicated. "
Experts predict 32% of Americans will be unemployed
"The new crown pneumonia epidemic is overturning everything in the global economy, from junk bonds to orange juice prices," the US "Quartz" magazine website reported on Tuesday. Since the outbreak, stocks have plummeted, oil prices have plummeted, and investors are fleeing any risky ones. Assets, and as people are forced to house their homes and look forward to vitamin C-containing orange juice to boost their immunity, orange juice futures prices have soared in recent days.
However, orange juice is just a special case, and the torrential rain is the climate that has shrouded the global economy. "360,000 emergency assistance applications", according to the German "Photo" reported on Tuesday that the outbreak severely hit small and medium-sized companies, many companies are facing bankruptcy, and the German government executive has received at least 360,000 applications for crisis assistance from SME owners in the past few days. .
In Japan, the employment of fresh graduates of universities has been affected by the epidemic. According to TV Asahi, a graduating Japanese female college student was originally scheduled to work at a bank card settlement agency. The company has issued her an admission notice, but recently she was suddenly notified that her admission was cancelled. She was shocked and bewildered she lost her hard-to-find job overnight. According to Japan ’s NHK TV station, the Japanese Minister of Health, Labour and Welfare, Kato, said that the number of layoffs and cancellations of recruited employees due to the expansion of the new crown pneumonia epidemic is increasing.
US department store giant Macy's announced on Monday that it will force most of its 125,000 employees to take unpaid leave this week. The new crown pneumonia epidemic caused heavy losses to Macy's, which had closed its 775 stores in the United States earlier this month. Swedish retailer H & M has also temporarily closed more than 3,400 stores worldwide and announced that some temporary layoffs may turn into permanent layoffs.
"USA Today" said on Tuesday that according to Federal Reserve economist Castro's forecast, the new crown pneumonia epidemic will cause 47 million people in the United States to be laid off in the second quarter, and the unemployment rate may reach 32%, which will be the United States since 1948. The highest unemployment rate, the US unemployment rate during the Great Depression was only 25%. According to French economists' forecast, France will lose 3% of its GDP for a month of "closing the city", and 6% if it is extended for another month. According to statistics, the area currently most affected by the epidemic in France is the construction industry, which has reduced related activities by 89% compared to normal levels; in addition, manufacturing (except food processing) has decreased by 52%, and the retail industry has decreased by 36%.
According to a report by the BBC on Monday, Carlosio, a British restaurant chain founded in 1991, has been declared bankrupt by the outbreak. Brighthouse, Britain's largest home appliance leasing operator, has also declared bankruptcy. Japan's Nomura Bank expects the UK's economy to fall by 13.5% this year. The German Federal Government's Economic Advisory Board predicted on Monday that in the worst case, GDP may decline by 5.4% in the whole year. Schweizer, chairman of the German Chamber of Commerce, expressed concern that after the epidemic, 1 in 10 SMEs across the country will declare bankruptcy.
Government continues to push economic stimulus
In order to alleviate the economic impact of the epidemic, governments of all countries are launching heavy economic support policies. According to the Nihon Keizai Shimbun, Japanese Deputy Prime Minister and Finance Minister Taro Aso said on Tuesday that those who have been temporarily unable to repay their home loans due to the epidemic have asked financial institutions to allow them to delay the delivery of loans. Earlier, Prime Minister Shinzo Abe said that the amount of aid to be issued for the epidemic will reach more than 10% of Japan's annual GDP (close to US $ 500 billion).
According to a report by the Financial Times on Tuesday, the German government is about to pass a € 156 billion emergency "supplementary" budget for 2020, which includes direct funding for small businesses. Companies with no more than five employees will be eligible for a three-month subsidy of 9,000 euros per month. The government has also stipulated that landlords cannot expel tenants who are in arrears due to the outbreak. Similarly, the French government has set up a solidarity fund of 1 billion euros, and small companies that meet the requirements can apply for a subsidy of 1,500 euros each. In addition, the government exempts businesses affected by the epidemic, such as retail and catering, from electricity, gas, and rent, as well as the minimum corporate taxes, and pays "sick leave" subsidies to parents who have to take care of their children at home due to school suspensions. .
The US government will release stimulus funds to families over the next three weeks, with most adults receiving $ 1,200 and minors under 17 receiving $ 500. US Treasury Secretary Mnuchin said that they "all work day and night" to boost the weak economy. According to the New York Times on Tuesday, following the $ 2 trillion economic stimulus plan, Washington officials have begun working together to formulate the next phase of the economic stimulus plan to respond to the epidemic.
There are also comments that question the government's approach to saving the economy. "Helicopters save money, can inflation still be far behind?" The Financial Times commented on Tuesday that the benefit of "helicopters save money" is to give purchasing power directly to people who are more willing to consume, because the middle class and low-income people Marginal consumption tends to be much higher than that of the rich, and they really spend it when they get the money. But too generous unemployment insurance may help to some extent, because it encourages unemployment and increases the risk of inflation. "We have become too reliant on monetary policy to get rid of all the difficulties in the world." Stephen Roach, a senior researcher at the Jackson Center for Global Affairs at Yale University in the United States, wrote on March 31 in Singapore's Lianhe Zaobao that coping with the crisis can only be achieved from Fundamentally, we have to find a way, and in this pandemic, we must focus on the containment of viruses.
[Global Times correspondent special correspondent Sun Xiuping Wen Yan Qingmu Qiang Wei Liu Lingling in Japan, the United States, Germany, France, and the United Kingdom]