Much like the previous recession in 2008, China has emerged from the economic headwinds in pole position for recovery. Having recovered early from the harrowing days early on in the pandemic as a result of draconian lockdown measures, it now looks to be the only economy in the world that will see growth amid the present downturn. Beijing announced a rapid growth recovery of 3.2% in 2Q2020 following a sharp 6.8% contraction in 1Q2020.

China’s unexpected recovery is a bright light for beleaguered EMs struggling to stimulate their way out of recession. During the Global Financial Crisis (GFC) a decade ago, it was China’s strong and resilient growth that pulled EMs out of the financial doldrums and onto the road to recovery. But China was an export-oriented economy in a free trade world then; it is now more focused on domestic consumption in a more protectionist environment. Can China save EMs again? 

Fiscal discipline 

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