The ongoing COVID-19 pandemic has disrupted economic growth in an unprecedented way not only in China but around the world. Despite the global downturn, it now seems to be a great opportunity to continue investment in the world’s second-largest economy, which is likely to become the strongest growing country in the world after the epidemic, top global investors said.
Stephen A. Schwarzman, a Wall Street influencer and chairman and CEO of Blackstone, the world’s top alternative asset management firm, said that China will come out of this downturn as probably the strongest growing country in the world. His comments were made during an online dialogue with Neil Shen Nanpeng, managing director of Sequoia Capital China, late on Thursday.
Schwarzman said the recently released Chinese GDP slump in the first quarter should be seen as the bottom point, “a great opportunity for future growth in China.”
China’s GDP contracted 6.8 percent in the first three months of the year, its first decline since 1992 when the nation started publishing quarterly GDP data.
Retail sales plummeted 19 percent to 7.86 trillion yuan ($1.11 trillion) in the first quarter, while industrial added-value was down 8.4 percent, and fixed-asset investment dived 16.1 percent to 8.41 trillion yuan, according to the National Bureau of Statistics.
“China has some natural advantages for its own economy and it continues to internalize them,” said Schwarzman.
He also shared his opinion on recent discussions about global companies that are considering moving their supply chains out of China in the wake of the coronavirus crisis, pointing out that possible moves are not directed at China.
It is a lesson learned from the pandemic: Supply chains should be diversified rather than overly concentrated in one country, he said, adding that intensely competitive countries like China are still in an advantageous position.
“There is no question that this pandemic will have economic impacts that last beyond the initial period of controlling the virus. But I think by 2021, we will be through the vast majority of this, countries will be back at work with different levels of recovery, and we will eventually see economic growth rates similar to before the pandemic,” Schwarzman told the Global Times in an earlier interview.
Shen said the epidemic period has accelerated the transformation process in China that digital technologies have upgraded the manufacturing and services sectors.
“It is time to double down on China on many sectors, and the most important ones are around technology and innovation,” Shen said during the dialogue.
The healthcare industry including vaccines and drugs is expected to enjoy higher growth, according to Shen.
The Sequoia Capital China, as a venture capital firm, is widely viewed as a bellwether for Chinese investment in the high-tech sector.
The Chinese arm of Silicon Valley venture capitalist Sequoia Capital has reportedly invested in more than 500 firms in China, including tech giants JD.com and Alibaba Group Holding, as well as some of China’s fastest-growing firms such as Didi Chuxing, Meituan Dianping and Beijing Bytedance Technology.