China's economy normalisng after coronavirus peaked, but risks exist: IMF

The International Monetary Fund officials on Friday rekindled hopes of normal activity in China after a full-blown shock caused by the coronavirus on their economy.

"China's economy is beginning to show some signs of normalisation , but stark risks remain," officials said in a blog on the economic impact of the pandemic. 

Most larger Chinese firms have reopened and many local employees have returned to work, but infections could rise again as national and international travel resumes, the IMF officials said.

Outbreaks in other countries and financial market gyrations could make consumers and firms wary of Chinese goods just as the economy is getting back to work, they said.

The statistics bureau of China had earlier expected the impact from the coronavirus outbreak on the economy to decrease in the second quarter and the pressure on the country’s unemployment would ease as economy improves.

Authorities are still confident of achieving the full-year economic growth target, said bureau spokesman Mao Shengyong, adding that the economy is expected to show significant improvement in March.

China’s nationwide survey-based jobless rate rose to 6.2 per cent in February, compared with 5.2 per cent in December, the latest official data showed.

China’s economy has suffered a heavy blow as the epidemic has paralyzed activity, with industrial output contracting at the fastest pace in 30 years and fixed-asset investment falling for the first time on record. 

For a second day, China has found no domestically transmitted cases of the virus that emerged in its central province of Hubei late last year, according to new daily figures registered. But, the imported cases have risen to a record 228 as infected travellers spread to ever more provinces, adding pressure on authorities to toughen entry rules and health protocols

Fears of a second wave of infections are growing just as China brings its epidemic under control, with the spread of the virus in Europe and North America spurring a rush homewards by Chinese expatriates, many of them students.

Globally, 245,000 people have been infected and more than 10,000 have died.