Independent Report Shows That China’s Economy May Shrink 10% in Q1

China’s national economy may contract as much as 10% in the first quarter, an independent survey shows.

China Beige Book, data analytics firm focused on China, performs an independent survey of more than 3,300 Chinese businesses every quarter. According to their latest data, indicators are pointing toward the GDP contraction of 10% to 11%.

This is the lowest these primary indicators have printed in nearly 10 years since the China Beige Book is tracking China’s economy. The firm said that large businesses are operating at a rate between 80% to 90%, however the Small and medium-sized enterprises (SME), the key driving force behind the national economy, are around 60%.

As a result, the Q1 results may either lead towards recovery or the economy may require a stronger intervention from the government.

Last week, China released official employment data which showed that around 5 million people lost their jobs due to the coronavirus outbreak in January and February. As a result, the official unemployment figures, which are highly contested by international financial institutions, jumped to 6.2% in February from 5.3% in January.