HONG KONG — The coronavirus pandemic is sending China’s economy, long the world’s growth engine, into a tail spin.
Gross domestic product fell at an annual rate of 6.8 percent in the first quarter, the first contraction since the country began releasing the figures in 1992, official data showed Friday. That’s a dramatic reversal for the world’s second-largest economy, which had been slowing in recent years but had still achieved growth rates of around 6 percent or more.
China’s leaders locked down swaths of the country in January to prevent the spread of infection, weeks after the coronavirus emerged in the city of Wuhan.
As authorities fought back the pandemic in China, the ruling Communist Party has pressed to get business gradually returning to normal without unleashing a second wave of infections. That’s proving a challenge. Beijing has also grown concerned as imported cases trickle in from abroad, notably among Chinese nationals returning from Russia.
Businesses that have resumed operations have often faced higher costs associated with hygiene measures and supply-chain disruptions. And with export markets in the United States and Europe facing a severe downturn, China’s policymakers face an uphill battle to right the ship.
“The scale and breadth of China’s economic contraction are staggering, and its ramifications for global growth are already becoming apparent,” said Eswar Prasad, professor of economics at Cornell University and former head of the China division at the International Monetary Fund, in an email. “China’s economic collapse is a bellwether of what the data for other major economies will reveal in the coming weeks.”
Unlike after the global financial crisis, there is little prospect of China driving a revival of global growth, Prasad added.
Asian markets had traded higher Friday and were little moved after China’s GDP figures. Benchmark indexes in Japan, Hong Kong and Australia were each about 2 percent higher, while U.S. stock futures were up 3 percent.