Asian markets rallied on Friday. Cathay Pacific Airways, Hong Kong’s flag carrier, said that it had laid off nearly 300 employees in the United States.
Asian markets surge on signs of overcoming the pandemic.
Investors in Asia on Friday found a reason to cheer despite a disastrous economic report from China, sending shares higher and signaling the start of a strong trading day.
South Korean shares led a broad regional rally at midday, with many markets up more than 2 percent. Futures markets were predicting a similarly cheery opening on Wall Street.
Though the world economy remains under siege, investors were looking to signs of progress. Some looked to a media report that a drug from Gilead Sciences showed early — and, thus far, unproven — promise in fighting the coronavirus. Boeing said it was resuming commercial plane production. China reported for the first time in decades that its economy shrank, but the number was still better than some had forecast.
Prices for U.S. Treasury bonds fell in early Friday trading, suggesting investors were willing to take more risks.
At midday Friday in Asia, Japan’s Nikkei 225 index was up 2.3 percent. Hong Kong’s Hang Seng index was up 2.2 percent. In South Korea, the Kospi was up 3.3 percent. Australia’s S&P/ASX 200 index was up 2.1 percent.
China’s official G.D.P. shrinks for the first time since 1976.
The coronavirus outbreak has brought China’s extraordinary, nearly half-century-long run of growth to an end — a stark reminder of the enormous task ahead for world leaders trying to restart the global economy.
China’s National Bureau of Statistics said on Friday morning that the country’s economic output shrank 6.8 percent from January through March compared to the same period last year. It’s the first economic shrinkage acknowledged in official statistics since 1976, when the country was in the final days of the Cultural Revolution, a national spasm of urban violence and torture.
The stark numbers reflect China’s dramatic efforts to stamp out the coronavirus, which included shutting down most factories and offices in January and February as the outbreak sickened tens of thousands of people.
They also illustrate how hard it will be to get the global economy back on its feet.
China is trying to restart its vast, $14 trillion economies, an effort that could give the rest of the world a much-needed shot in the arm. But the spread of the virus to Europe and the United States has sharply cut the world’s appetite for China’s goods. That could lead to factory shutdowns and worker furloughs.
China’s National Bureau of Statistics confirmed last month that domestic industrial production, retail sales, and investment all suffered record, double-digit drops in the first two months of this year compared with the same period of 2019.
“This year is difficult — some have lost their jobs, some cannot find work to do,” said Liu Xia, a fruit vendor from a village on the northern outskirts of Beijing. “Those who do go to work and those who are still in business are greatly affected.”
Beijing’s options for dealing with the crisis are limited. Its economy has become too big and complex to easily restart as it did in 2008 when it unveiled a plan to spend more than half a trillion dollars. And years of easy lending have left local governments and state-run companies mired in debt.
Originally published on www.nytimes.com