BlackRock Sees China’s Economy Resuming “Near-trend Growth” by End of 2020

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Analysts from US investment giant BlackRock expect the Chinese economy to achieve a rapid convalescence from the impacts of the COVID-19 pandemic after implementing strict containment measures.

BlackRock analysts said that the Chinese economy could return to “near-trend growth” by as early as late 2020, in a research note issued at the start of June.

The note pointed to economic policies adopted by Beijing to support the Chinese economy, including fiscal stimulus measures, prompting BlackRock to give Asian equities and credit markets outside of Japan an “overweight” outlook.

BlackRock is not the only international financial institution with a sanguine take on the Chinese economy in the wake of the COVID-19 pandemic.

Michael Spencer, Deutsche Bank’s chief economist and head of research for the Asia Pacific, told CNBC on 8 June that China’s economic recovery “is “going to look very impressive.”

“The domestic demand part of the Chinese economy has recovered well,” said Spencer, pointing to the normalisation of “a broad range of indicators” including auto and property sales.

Spencer forecasts 5 – 6% quarter-on-quarter growth in April-June, following a contraction in the first quarter of 2020.

Spencer nonetheless points to major risk to the Chinese economy from the US if it reopens “too soon,” and as a consequence sees a second wave of Novel Coronavirus infections.

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