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China and COVID-19: a shock to its economy, a metaphor for its development

George Magnus


George Magnus


The Chinese government’s draconian actions to control the coronavirus seem to be producing a remarkable economic contraction. As so many are unable to attend or resume work at the moment, the government’s palliative economic measures may gain little traction. Although the demand shock will eventually fade, other longer-term issues will surely endure. 

The supply shock will be less obvious but more corrosive. The government’s questionable conduct in managing the public health crisis has unveiled significant features about governance in Xi’s China that can be mapped on to China’s development. While this crisis is the biggest challenge Xi has faced, there is little doubt that he will survive it, champion the party’s role in the nation’s rescue, and feel emboldened to continue with his authoritarian governance. Yet it is this that, in the long run, will prove incompatible with China’s economic development ambitions. 

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China and COVID-19

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China and COVID-19

About the Author

George Magnus is Research Associate at the China Centre, Oxford University, and at the School of Oriental and African Studies, London. George was the Chief Economist, and then Senior Economic Adviser at UBS Investment Bank from 1995-2016. He had previously worked as the Chief Economist at SG Warburg (1987-1995), and before that at Laurie Milbank/Chase Securities, Bank of America and Lloyds Bank. His written work and a blog can be found on his website at George’s current book, Red Flags: why Xi’s China is in Jeopardy was published in 2018 by Yale University Press, and then in paperback in August 2019 with newly commissioned material.