China’s economic recovery could be ‘very impressive’ — but the U.S. stands in the way, Deutsche Bank says

CNBC reports that China’s economy is improving and could register “very impressive” growth — but the U.S. is the biggest risk that could derail that recovery, a Deutsche Bank economist said on Monday.

Much of the global economy is still reeling from lockdown measures imposed to contain the coronavirus pandemic. Restrictions that include workplace closures and stay-at-home orders significantly cut down economic activity worldwide — dampening any prospects for growth this year.

But China, where the coronavirus first emerged, is often cited as one of the few economies that could still grow. The Chinese recovery is “going to look very impressive” with a growth of 5%-6% quarter on quarter in April-June, following a contraction in the previous three months, said Michael Spencer, Deutsche Bank’s chief economist and head of research for Asia Pacific.

 “The domestic demand part of the Chinese economy has recovered well,” he told CNBC.

Spencer said “a broad range of indicators” — such as auto and property sales — are “returning to normal” in China. The country’s exports have also been better than expected, but could get “a lot worse” in the next few months given the economic weakness in China’s major export destinations, he added.

The biggest risk to the Chinese — and global — economy is the U.S., according to the economist. He explained that the U.S. is reopening “too soon” from lockdown measures, which could trigger another wave of infections and further rounds of restrictions.

That would leave the U.S. economy struggling, in spite of a surprise jump in employment gains, added Spencer.