Assessing the Impact of the COVID-19 Pandemic on the Economies of China and Russia

Автор: Li Zhimeng, Lukin E.V., Sheng Fangfu, Zeng Wenkai

Журнал: Economic and Social Changes: Facts, Trends, Forecast @volnc-esc-en

Статья в выпуске: 5 т.14, 2021 года.

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The COVID-19 pandemic has significantly affected economic development in countries around the world. It aggravated existing problems and increased the demand for economic transformation, modernization and qualitative development, triggered a new technological reform, which led to the emergence of new economic business forms and new consumption. The article assesses the impact of the COVID-19 pandemic on the economies of China and Russia. To achieve this goal, we review the state of business activity in the manufacturing and non-manufacturing sectors of the national economy, and summarize the main measures of the anti-pandemic policy implemented by the Chinese and Russian governments. We look into the dynamics of functioning of offline economic spheres that are aimed at personal communication (tourism, catering, retail, transport, culture, entertainment), as well as online spheres implying human-computer interaction (electronic retailing, express delivery, remote work, telemedicine) in the context of the COVID-19 pandemic. We make conclude that the extent of COVID-19 impact on the economy depends on the effectiveness of measures for its prevention and control. We are convinced that at the moment it is necessary to correlate these measures with economic and social development policies, and take into consideration increased consumption as an important aspect of mitigating the effects of COVID-19, accelerate the transformation and modernization of traditional industries, actively develop new economic business forms and build a more open monetary circulation both within the country and globally, thus enhancing the role of the state in global supply chains.

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China, Russia, COVID-19 pandemic, economy, impact

Короткий адрес: https://sciup.org/147234820

IDR: 147234820 | DOI: 10.15838/esc.2021.5.77.16

Текст научной статьи Assessing the Impact of the COVID-19 Pandemic on the Economies of China and Russia

The COVID-19 pandemic and the resulting social distancing, isolation, and travel restrictions have changed people’s lifestyles and production modes and affected global economic and social development. According to the World Bank, the volume of world trade as of the end of 2020 decreased by 9.5% compared to the previous year¹. The implications of the COVID-19 pandemic have affected almost all economic sectors in one way or another. Airlines and cruise companies, casinos and hotels faced a reduction in the number of tourists by almost 90% [1]. A sharp decline in demand for food products on the part of hotels and restaurants led to a 20% drop in prices for agricultural products [2]. Negative dynamics were observed in many industries, in retail trade, and in the world commodity markets ( Figures 1 and 2 ). Oil prices collapsed by 34%, investment activity slowed down by 5.5%².

As a result, global GDP dropped in the first quarter of 2020 by 8.1% compared to the level of the fourth quarter of 2019; the decline accelerated to 13.7% in the second quarter of 2020³. According to the results of 2020, GDP decline in the world is estimated at 4.3% compared to 2019 (Tab. 1) . The decline and slowdown in economic dynamics were observed in most countries. At the same time, among major economies, China and Russia demonstrated one of the highest levels of resistance to the crisis caused by the COVID-19 pandemic.

The aim of our study is to assess the impact of the COVID-19 pandemic on the economies of China and Russia.

Prevention and control of the spread of COVID-19 in China and Russia

Prevention and control policies have become the foundation of China’s pandemic response strategy. The emphasis was placed on strict discipline in terms of compliance with quarantine measures, mass testing, and preventive transition to working

Figure 1. Dynamics of global economic activity indicators in 2020, % to the level of December 2019

Figure 2. Dynamics of world prices for certain goods in 2020, % to the level of December 2019

Retail trade

Industrial production

Population mobility

Table 1. GDP growth rate, in % relative to the previous year

Country	2018	2019	2020 (estimate)	2021 (forecast)	2022 (forecast)
World	3.0	2.3	-4.3	4.0	3.8
Developed economies	2.2	1.6	-5.4	3.3	3.5
United States	3.0	2.2	-3.6	3.5	3.3
Euro area	1.9	1.3	-7.4	3.6	4.0
Japan	0.6	0.3	-5.3	2.5	2.3
Emerging markets and developing countries	4.3	3.6	-2.6	5.0	4.2
East Asia and the Pacific Basin	6.3	5.8	0.9	7.4	5.2
China	6.6	6.1	2.0	7.9	5.2
Indonesia	5.2	5.0	-2.2	4.4	4.8
Europe and Central Asia	3.4	2.3	-2.9	3.3	3.9
Russia	2.8	2.0	-3.0	2.6	3.0
Latin America and Caribbean countries	1.9	1.0	-6.9	3.7	2.8
Brazil	1.8	1.4	-4.5	3.0	2.5
Middle East and North Africa	0.5	0.1	-5.0	2.1	3.1
Saudi Arabia	2.4	0.3	-5.4	2.0	2.2
South Asia	6.5	4.4	-6.7	3.3	3.8
India	6.1	4.2	-9.6	5.4	5.2
Sub-Saharan Africa	2.6	2.4	-3.7	2.7	3.3
Republic of South Africa	0.8	0.2	-7.8	3.3	1.7

Rosstat.

Figure 3. Daily new confirmed cases of COVID-19 in China

Note: 15,152 new confirmed cases of COVID-19 were reported on February 12 (13,332 clinically diagnosed cases in Hubei province were counted as the new confirmed cases on that day)

Source: Fighting COVID-19: China in Action.

Figure 4. Daily number of COVID-19 deaths in China

Source: Fighting COVID-19: China in Action.

from home. It took China just over a month to establish a preliminary control of the spread of COVID-19, about two months to reduce the number of daily new cases to less than ten, and about three months to achieve convincing results in the fight against COVID-19 in Wuhan and

Hubei, and also obtain significant strategic results in COVID-19 prevention and control (Fig. 3, 4) ⁴. Currently, the COVID-19 situation in China is under control, but due to imported cases, there are still periodic outbreaks of the virus in different regions of the country.

In the fight against coronavirus, Russia has chosen a strategy of extensive testing for and the earliest possible detection of COVID-19⁵, compulsory monitoring of those who test positive, and a voluntary and advisable transition to remote work. The period of strict quarantine lasted six weeks, after which Russia started to relax the imposed restrictions for the population and business⁶ (Fig. 5) .

In general, we can note that the strategy China used to counter the spread of COVID-19 has proven highly effective. The Chinese authorities managed to suppress the pandemic very quickly and decisively and to prevent its second wave. The more lenient Russian strategy to combat the coronavirus looks less successful in comparison, but in many large countries the situation with the implementation of anti-pandemic policies was even more difficult. Thus, the death rate from COVID-19 in Russia (715 deaths per 1 million inhabitants) was significantly lower than in Italy (1,927), the UK (1,909), the United States (1,762), Brazil (1,675), Spain (1,645), France (1,514), Argentina (1,293) and Germany (960)7.

Figure 5. Daily number of COVID-19 cases and deaths in Russia

------Deaths ------Cases (right scale)

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