Impact of COVID-19 on China's macroeconomy and agri-food system: An economy-wide multiplier model analysis

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cg.authorship.typesCGIAR single centreen_US
cg.authorship.typesCGIAR and developing country instituteen_US
cg.contributor.crpPolicies, Institutions, and Marketsen_US
cg.contributor.donorNational Natural Science Foundation of Chinaen_US
cg.contributor.donorChinese Academy of Agricultural Sciencesen_US
cg.coverage.countryChinaen_US
cg.coverage.iso3166-alpha2CNen_US
cg.coverage.regionAsiaen_US
cg.coverage.regionEastern Asiaen_US
cg.creator.identifierXinshen Diao: 0000-0003-4843-1670en_US
cg.creator.identifierKevin Chen: 0000-0001-7927-4132en_US
cg.creator.identifierSherman Robinson: 0000-0002-5478-9372en_US
cg.creator.identifierShenggen Fan: 0000-0002-2658-4863en_US
cg.identifier.doihttps://doi.org/10.1108/caer-04-2020-0063en_US
cg.identifier.projectIFPRI - Director General's Officeen_US
cg.identifier.projectIFPRI - Development Strategy and Governance Divisionen_US
cg.identifier.projectIFPRI - COVID-19 Measuring Impacts and Prioritizing Policies for Recoveryen_US
cg.identifier.publicationRankCen_US
cg.isijournalISI Journalen_US
cg.issn1756-137Xen_US
cg.issue3en_US
cg.journalChina Agricultural Economic Reviewen_US
cg.reviewStatusPeer Reviewen_US
cg.volume12en_US
dc.contributor.authorZhang, Yumeien_US
dc.contributor.authorDiao, Xinshenen_US
dc.contributor.authorChen, Kevin Z.en_US
dc.contributor.authorRobinson, Shermanen_US
dc.contributor.authorFan, Shenggenen_US
dc.date.accessioned2024-05-22T12:10:25Zen_US
dc.date.available2024-05-22T12:10:25Zen_US
dc.identifier.urihttps://hdl.handle.net/10568/142397en_US
dc.titleImpact of COVID-19 on China's macroeconomy and agri-food system: An economy-wide multiplier model analysisen_US
dcterms.abstractThe purpose of this study is to assess the potential economic cost of the COVID-19 pandemic on China's macroeconomy and agri-food system and provide policy recommendations to stimulate economic growth and agri-food system development.An economy-wide multisector multiplier model built on China's most recent social accounting matrix (SAM) for 2017 with 149 economic sectors is used to assess the impact of COVID-19 on China's macroeconomy and agri-food system. SAM multiplier analysis focuses on supply chain linkages and captures the complexity of an interconnected economy.The paper finds that both the macroeconomy and agri-food systems are hit significantly by COVID-19. There are three main findings. First, affected by COVID-19, GDP decreased by 6.8% in the first quarter of 2020 compared with that in 2019, while the economic loss of the agri-food system is equivalent to 7% of its value added (about RMB 0.26 trillion). More than 46m agri-food system workers (about 27% of total employment) lost their jobs to COVID-19 in the lockdown phase. The COVID-19 affects the employment of unskilled labor more than that of skilled labor. Second, when the economy starts to recover during the second and third quarters, the growth rate in the value added of the agri-food system turns positive but still modest. Many jobs resume during the period, but the level of agri-food system employment continues to be lower than the base. The agri-food system employment recovery is slower than that of other sectors largely due to the sluggish recovery of restaurants. Agri-food system employment drops by 8.6m, which accounts for about 33% of the total jobs lost. Third, although the domestic economy is expected to be normal in the fourth quarter, external demand still faces uncertainties due to the global pandemic. The agri-food system is projected to grow by 1.1% annually in 2020 with resuming export demand, while only by 0.4% without resuming export demand. These rates are much lower than an annual growth rate of 4.3% for the agri-food system in 2019. The results also show that, without resuming export demand, China's total economy will grow less than 1% in 2020, while, with export demand resumed, the growth rate rises to 1.7%. These rates are much lower than an annual GDP growth rate of 6.1% in 2019.The results show that continuously reducing economic dependency on exports and stimulating domestic demand are key areas that require policy support. The agri-food system can play an important role in supporting broad economic growth and job creation as SMEs are major part of the AFS. Job creation requires policies to promote innovation by entrepreneurs who run numerous SMEs in China.This paper represents the first systematic study assessing the impact of COVID-19 on China's agri-food system in terms of value added and employment. The assessment considers three phases of lockdown, recovery and normal phases in order to capture the full potential cost of COVID-19.en_US
dcterms.accessRightsLimited Accessen_US
dcterms.bibliographicCitationZhang, Yumei; Diao, Xinshen; Chen, Kevin Z.; Robinson, Sherman; and Fan, Shenggen. 2020. Impact of COVID-19 on China's macroeconomy and agri-food system: An economy-wide multiplier model analysis. China Agricultural Economic Review 12(3): 387-407. https://doi.org/10.1108/CAER-04-2020-0063en_US
dcterms.extentpp. 387-407en_US
dcterms.issued2020-08-01en_US
dcterms.languageenen_US
dcterms.publisherEmeralden_US
dcterms.replaceshttps://ebrary.ifpri.org/digital/collection/p15738coll5/id/7315en_US
dcterms.subjectmodelsen_US
dcterms.subjecteconomic growthen_US
dcterms.subjecteconomic impacten_US
dcterms.subjectpoliciesen_US
dcterms.subjectcovid-19en_US
dcterms.subjectcapacity developmenten_US
dcterms.subjectmacroeconomicsen_US
dcterms.subjectagrifood systemsen_US
dcterms.subjectmultipliersen_US
dcterms.typeJournal Articleen_US

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