By Vincent Liu Liang
China’s insurance sector will be banking on domestic consumption to carry the country’s economy through a global slowdown as the world reels from the effects of the COVID-19 pandemic. At the same time, the crisis has also increased awareness on the importance of protection in the country.
On a whole, a deteriorating global trade environment is a major risk for the Chinese economy although the country has been adjusting its economic strategy focusing on a consumption-driven, digital economy-oriented growth model.
“In order to respond to the impact of the pandemic and promote high-quality economic development, China attaches great importance to the ‘new infrastructure’ projects as a means of promoting innovation and responding to a sharp economic slowdown,” said Swiss Re’s Group chief economist Dr. Jerome Jean Haegeli.
He added: “We believe that this signifies that China is based on the domestic market. Boosting domestic demand this year will mitigate the risks caused by external resistance such as the global economic recession, the continued risk of trade wars and the disruption of the supply chain caused by the epidemic. ”
In addition, he also said that in the global recession in 2020, the degree of shrinkage of economic activity and the rate of recession were twice that of the global financial crisis.
Swiss Re predicts that the global economy will decline in the first half of the year and will only partially recover slowly in the second half of the year. Global GDP will decline by 3.8% throughout 2020.
Asia Insurance Review