The impact of the novel coronavirus on China’s economy is devastating, with one of the world’s most trusted economists believes that no growth is expected from the second-biggest economy. Evercore ISI Chairman Ed Hyman said he sees no economic growth in China in the first quarter.
Speaking with CNBC, Hyman said that market pullback Friday “is still a worry about the virus,” and that “Our team has GDP growth at zero for the first quarter … China is really slowing, and that’s worrying people for sure.”
While the economist believes that the outbreak will definitely worsen China’s losing economy due to the trade war, he also believes that the nCoV crisis will not have a significant effect on the U.S. economy.
“We are so solid,” Hyman said. “It’s not the virus; it’s the trade that matters. People are not going out. They are not shopping, and that’s what’s hurting China particularly.”
China’s economic performance has since been slowing down since the trade war between Washington and Beijing intensified last year. Amidst the volley of tariff that pressured many industries around the world, China was able to grow its economy by 6.1% in 2019, its slowest pace since 1990.
The same forecast is echoed by other analysts. Pantheon Macroeconomics Chief Asia Economist Freya Beamish earlier said that China’s economy could grow by less than 2% year-over-year.
“The authorities are saying that there could be one percentage point shaved off year-over-year growth, so we get down to the 5% region — that is already a huge admission from the Chinese authorities, particularly in the year when they’ve got this long-term poverty reduction goal during which they need to meet that 6% growth rate, and (Chinese President) Xi Jinping is still talking about that,” Beamish said.
Amidst its reported growth of 6.1%, Beamish said that this level of growth from China is “extremely weak.”
“We are thinking in the region of 3.8% year-over-year, and again plugging in those numbers, we’re looking at year-over-year growth of probably less than 2%,” she said, adding that to see those numbers emerging from a Chinese GDP spreadsheet was “quite a shocker.”
