Michael Pettis on Coronavirus hit to China's GDP
I know research analysts are under huge pressure to come up with these kinds of projections, but it is far too early to give meaningful estimates about the impact of the coronavirus on first quarter economic activity, let alone the full year. We still don't know what businesses will be opening, how consumption will be affected, whether migrant workers will return to work, or even whether the peak of the problem is behind us or several weeks ahead of us. What is more, economists are confusing the real economy with reported GDP growth. Whatever Q1 growth is, as long as China has debt capacity – and Beijing under political pressure to use it, whatever the longer-term economic cost – GDP growth for the year will be whatever GDP growth target they announce formally in March.