US, Euro Area and China GDP over the Pandemic and Recovery

Following up on the last post, here is a graph of three major economies.

Figure 1: Real GDP for US (blue), for Euro area (tan), for China (green), and GDO for US (light blue), all in logs, 2019Q4=0. NBER defined peak-to-trough recession dates for United States shaded gray. Source: BEA, Eurostat, via FRED, China NBS, NBER, and author’s calculations.

At current exchange rates, these three economies account for about 60% of world GDP (China is about 20%, US about 25%).

The sharp drop in Chinese GDP in Q2 highlights the threat to global economic output posed by the Chinese government’s current approach to dealing with the pandemic.

 

 

 

 

31 thoughts on “US, Euro Area and China GDP over the Pandemic and Recovery

  1. ltr

    The sharp drop in Chinese GDP in Q2 highlights the threat to global economic output posed by the Chinese government’s current approach to dealing with the pandemic.

    [ The Chinese approach to dealing with the pandemic is to protect the health and life of each and every person in China, and the approach has been stunningly successful in both protection and in learning how to grow through the pandemic while building all the potential necessary to grow with increasing productivity from here. ]

    Reply
    1. Barkley Rosser

      Although, ltr, it is periodically reported that people are dying in the lockdowns not from Covid but from being unable to access proper medical care due to being forced to stay in their residences. There have been some widely reported specific cases of this, but it seems that nobody is actually counting the numbers involved in these cases. But these must be viewed as an offset to the prevention of deaths due to Covid.

      Reply
      1. ltr

        Although, —, it is periodically reported that people….

        [ Although it is periodically reported that people are finding Martians in pine trees, my understanding is that they are only finding squirrels chewing on the cones. Widely reported findings, but no one has been counting the squirrels or nuts. ]

        Reply
        1. Barkley Rosser

          ltr,

          This response is far beneath what you usually come up with, even your exaggerated claims of racism. This is a real issue, not “Martians.” There are lots of stories on it. wired.com/story/shanghai-lockdown-censorship-deaths reports on efforts by people in Shanghai to get deaths of their relatives due to inability get medical care during the lockdown there, but with their efforts being suppressed and censored.

          When I mentioned this previously, you seemed to admit it is an issue. Now you are attempting ridicule, but it only makes you look ridiculous. It is flamingly obviously that when people are locked down as vigorously as has been happening in many places in China, many will find themselves getting needed health care, with this obviously leading to some of them dying, ;probably a lot of them. But they are not getting counted, with you suggesting somehow they are as common as Marians in trees or something.

          Have you completelyu lost your mind or any shred of credibility? This is not just ridiculoos, it is outrighe insane what you are suggesting OF COURSE PEOPLE AARE DYING due to this policy.

          Reply
        2. baffling

          what a rude and ignorant response to an important point regarding the chinese response to the pandemic. why the need to ridicule and bully because somebody disagrees with your position? nevertheless, the people on this blog will continue to proudly point out the fallacy of your arguments, and not hide behind the propaganda as ltr suggests, no matter how racist and rude ltr’s responses may be.

          Reply
    2. AndrewG

      [ The Chinese approach to dealing with the pandemic is to protect the health and life of each and every person in China, and the approach has been stunningly successful in both protection and in learning how to grow through the pandemic while building all the potential necessary to grow with increasing productivity from here. ]

      They letting you write your own propaganda now? Congrats on your promotion! Very eloquent lies, btw.

      Reply
  2. ltr

    https://news.cgtn.com/news/2022-09-19/Chinese-mainland-records-147-new-confirmed-COVID-19-cases-1drNtsz0BJm/index.html

    September 19, 2022

    Chinese mainland records 147 new confirmed COVID-19 cases

    The Chinese mainland recorded 147 confirmed COVID-19 cases on Sunday, with 92 attributed to local transmissions and 55 from overseas, data from the National Health Commission showed on Monday.

    A total of 843 asymptomatic cases were also recorded on Sunday, and 17,987 asymptomatic patients remain under medical observation.

    The cumulative number of confirmed cases on the Chinese mainland is 248,326, with the death toll from COVID-19 standing at 5,226.

    Chinese mainland new locally transmitted cases

    https://news.cgtn.com/news/2022-09-19/Chinese-mainland-records-147-new-confirmed-COVID-19-cases-1drNtsz0BJm/img/b29acde73ccd4527b7e8afcd832e2d04/b29acde73ccd4527b7e8afcd832e2d04.jpeg

    Chinese mainland new imported cases

    https://news.cgtn.com/news/2022-09-19/Chinese-mainland-records-147-new-confirmed-COVID-19-cases-1drNtsz0BJm/img/c27b05968aa04ad8adf8c3cce89bc6f6/c27b05968aa04ad8adf8c3cce89bc6f6.jpeg

    Chinese mainland new asymptomatic cases

    https://news.cgtn.com/news/2022-09-19/Chinese-mainland-records-147-new-confirmed-COVID-19-cases-1drNtsz0BJm/img/e8fb47e8a20f46a7854d5b5c2234fdaa/e8fb47e8a20f46a7854d5b5c2234fdaa.jpeg

    Reply
      1. Barkley Rosser

        ltr,

        Wow! How did that number that was 4 per million dead decline to 3.6? Did some people come back to life, or were some of those who died reclassified as having died of something else?

        Maybe this means that China has received 3.6 Nobel Prizes, :-).

        Reply
          1. Barkley Rosser

            Why did the number become 3.6 after having been 4 for so long we all became nearly sick of it? I supppose we should be grateful to see a new number, even if it makes no sense given the previous number. What changed?

        1. ltr

          “Maybe this means that —– has received 3.6 Nobel Prizes…”

          Yes, the experience of American-Indians who were left in 2021 with a distressing life expectancy of 65 years matters. *

          * https://www.cdc.gov/nchs/data/vsrr/vsrr023.pdf

          Yes, the experience matters. **

          ** https://www.medrxiv.org/content/10.1101/2022.04.05.22273393v4

          June 1, 2022

          Changes in Life Expectancy Between 2019 and 2021 in the United States and 21 Peer Countries
          By Ryan K. Masters, Laudan Y. Aron and Steven H. Woolf

          Reply
          1. Barkley Rosser

            ltr,

            BTW, I am not and never have been a defender of the US health care system. It is a horrible mess, and I have posted on that many times in various venues. That it is a disaster does not justify bad health policies in China.

          2. baffling

            wonder what the real life expectancy of the uighyers are in western china, after the genocide committed by the ccp. i am sure it is dropping as well.

  3. ltr

    https://english.news.cn/20220919/4d5f11c2476b45f4ba6f99587e6b9a1f/c.html

    September 19, 2022

    China’s FDI inflow up 16.4 pct in first eight months

    BEIJING — Foreign direct investment (FDI) into the Chinese mainland, in actual use, expanded 16.4 percent year on year to 892.74 billion yuan in the first eight months of the year, the Ministry of Commerce said Monday.

    In U.S. dollar terms, the inflow went up 20.2 percent year on year to 138.41 billion U.S. dollars.

    The service industry saw FDI inflow jump by 8.7 percent year on year to 662.13 billion yuan, while that of high-tech industries surged by 33.6 percent from a year earlier, data from the ministry showed.

    Specifically, FDI in high-tech manufacturing rose 43.1 percent from the same period a year ago, while that in the high-tech service sector surged 31 percent year on year.

    During the period, investment from the Republic of Korea, Germany, Japan, and the United Kingdom climbed by 58.9 percent, 30.3 percent, 26.8 percent, and 17.2 percent, respectively….

    Reply
  4. Macroduck

    In comments to the prior post, it was suggested that the current and expected slowdown is merely the result of policy aimed at getting the global(?) economy back on track after the Covid recession:

    “paraphrase:

    “the world is reversing the largest synchronous monetary and fiscal policy loosening ever….”

    If that were true, if earlier over-stimulation were the sole cause of a slowdown now, you’d expect to see global output at or above trend. In reality, this is what you see:

    https://fred.stlouisfed.org/series/NYGDPPCAPKDWLD#0

    Withdrawal of stimulus is not helping, but the world economy was not running hot due to over-stimulative policy when Russia invaded Ukraine,(again), when drought conditions worsened, when China’s property sector got all fidgety and China’s Covid vaccines proved to be so very, very disappointing.

    Reply
    1. AndrewG

      Nice share. I’m still quite skeptical. From the article:

      Last week, Ralph Axel, rates strategist at the Bank of America, said the issuer is the single largest systemic financial risk of the moment *but urged caution on the Fed becoming a “buyer of last resort”.*

      “In our view, declining liquidity and resiliency of the US Treasury market arguably poses one of the greatest threats to global financial stability today, *potentially worse than the housing bubble of 2004-2007*,” he wrote.

      Could just be my ignorance, but … I’m not sure what that even means. And yet this is the sort of thing we hear from certain corners in finance when the Fed tightens.

      And if there are hints of liquidity issues in the Treasury market, the Fed can slow, halt or even reverse its QE tightening quickly – technically even while raising interest rates.

      Reply
      1. GREGORY BOTT

        They lied. 2004-7 was as much excess debt meets weak currency. Rising rates have litt!e to do with actual credit expansion, especially since a strong dollar provides a ton of liquidity to financial sectors.

        Reply
  5. pgl

    https://www.msn.com/en-us/news/politics/rep-liz-cheney-reveals-how-trump-supporting-lawmaker-ripped-him-behind-his-back/ar-AA121ECx

    During an event on Monday at the American Enterprise Institute, Cheney recalled being in the House cloakroom and working on some remarks when she spotted a pile of papers for lawmakers to sign if they planned to object to the election’s results. “And as I was sitting there, a member came in and he signed his name on each one of the states’ sheets,” Cheney recalled. “And then he said under his breath, ‘The things we do for the Orange Jesus.’”

    Trump is indeed orange but he is more the anti-christ.

    Reply
    1. Moses Herzog

      Liz says a Republican classmate bent over in the backseat of a Chevy for donald trump, but won’t say which classmate it was?? How do we search out who “the easy one” is??

      Reply
      1. pgl

        The thought of this makes me go EWWW. Especially since Stormy Daniels has let it be known that you know what is only 3 inches. Make America Gag Again.

        Reply
  6. David O'Rear

    Given the enormous dissimilarities between China and either the US or EU, it makes more sense to me to compare each to its own recent history.

    Real GDP (% YoY)
    Area _ __ _ Q1-Q2 Avg
    _ _ _ _ _ 2017-19 _ _ _ 2022

    USA _ _ _ +2.43% _ _ +2.62%
    E.U. _ _ _ +2.29% _ _ +4.78%
    China _ _ +6.67% _ _ +2.60%

    Reply
    1. AndrewG

      Yeah, sure, but I have it on good authority that:

      [ The Chinese approach to dealing with the pandemic is to protect the health and life of each and every person in China, and the approach has been stunningly successful in both protection and in learning how to grow through the pandemic while building all the potential necessary to grow with increasing productivity from here. ]

      Reply
  7. Ivan

    It is sad that China which (like Australia and New Zealand) had a spectacularly successful response to Covid until January 2022, has failed to adapt to changing circumstances. I guess that is one of the disadvantages of being ruled by a germaphobic “dear leader”.

    The sensibility of doing lockdowns has gradually eroded. Before the advent of effective vaccines, and while the virus was about 10 times as deadly as the Flu; anything but a fairly strict lock-down policy was cruel and stupid

    After vaccines and plentiful supplies of N95 masks became available, it began making sense to let individuals make decision about whether they wanted the 90% protection from vaccinations and add the 95% protection from N95 masks – and add even more by avoiding crowded maskless indoor environments. The people who’s ignorance prevented them from these simple steps were no longer able to drastically increase risks to those who took sensible steps to protect themselves.

    When the Omicron variants arrived it was almost like a brand new virus. It was much more infectious but also less deadly than the previous strains of SARS-CoV-2. It is only about 2-3 times as deadly as a bad flue strain – but much more infectious than previous strains (and the Flu). This makes “zero Covid” a pipe dream that will simply draw out the inevitable infection of 50%+ of your population. You may be able to drag it out over 10 years but Covid will eventually come to the whole country and expose most of the people. So the question becomes whether this delay is worth the sacrifices endured due to zero Covid restrictions. Your graph nicely show what the economic sacrifices are – and in addition there are personal human sacrifices.

    Australia (and New Zealand) decided that the sacrifices were not worth the gain of delaying Covid exposure and drag the pandemic out another decade (before most people had been exposed to the virus anyway). So they did another vaccine drive and got their hospitals and health care systems ready to deal with a “bad Flu times 3” situation. New Zealand has had about 360,000 diagnosed cased per million people. Australia has had about 390,000 diagnoses cases per million people. Their death per case numbers are 608 and 687 death per diagnosed cases, respectively – much better than the death rates of more than 1 per 100 diagnosed cases seen in both China and US (although for different reasons). Indeed the deaths in Australia and New Zealand has not been much worse than a real bad Flu year – so if you want to argue for maintaining “zero Covid” policies you would have to explain why you are not arguing for “zero Flu” policies.

    Reply
      1. Ivan

        They could just compensate for poor vaccines with mandatory N95 masks in all indoor environments. The goal is to not allow the number of new cases per day to exceed the number that can be handled by the health care system. Their current approach target a much more illusive and destructive goal of “zero”. Even with a mediocre vaccine, they can adjust restriction to fit the first goal and remove most of the economic damage.

        Reply

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