Looking Back Deeper, Recovering up Better: Resilience-Oriented Contrarian Thinking about COVID-19 Economic Impact

Abstract

In the early stage of the COVID-19 outbreak, a vast majority of research predicted its potential economic impacts based on various possible scenarios, believing that looking forward earlier and recovering better. In contrast, through contrarian thinking from an economic recovery perspective, this study empirically investigates the direct impact of COVID-19 on China’s economy. This reveals that China’s economy experiences a V-shaped recovery; it is in the recovery process and will achieve the pre-pandemic level in the coming years. Consumption, international trade, and investment indicators are synchronously recovering, which may be attributed to the fact that the pandemic has had little impact on China’s economy, although it remarkably hits national consumption, international trade, and investment that are less interrupted. Empirical evidence shows that the pandemic is unlikely to alter China’s industrial structure, as it has primarily affected the service and manufacturing sectors while leaving agriculture relatively unaffected. In light of these findings, China’s economy is facing challenges beyond the pandemic. By adopting a recovery-oriented contrarian approach, we can better identify the dynamic consequences and optimize economic strategies to mitigate potential long-term impacts on sustainable economic growth. These insights may also help guide economic recovery efforts in other developing countries.