Coronavirus News Asia

Great Depression II threatens the global economy

A senior executive at the People’s Bank of China has warned that the world economy risks being plunged into a second Great Depression.

Zhu Jun, the director of the international department of the PBOC, the country’s de-facto central bank, told the Chinese media of the dangers and challenges facing the international community.

“The possibility of a ‘Great Depression’ cannot be ruled out if the epidemic continues to run out of control, and the deterioration of the real economy is compounded by an eruption of financial risks,” Zhu said, adding that this was the worst-case scenario.

After the Wall Street crash in 1929 which wiped out millions of investors, the worst economic downturn in the history of the industrialized world dragged on for a decade. 

At the depth of the slump in 1933, up to 15 million, or one in four Americans, were unemployed. By then, nearly half the country’s banks had failed.

Globally, the jobless queues lengthened, triggering a surge in nationalism across Europe.

Already unemployment is rising across the United States, Europe and China. Countries across the planet have been forced to lock down populations after closing factories, shops restaurants and entertainment centers in a move to stop the spread of this new strain of coronavirus. 

Business activity has barely a heartbeat. During the opening weeks of March, the US economy shed more than 700,000 jobs ending a decade of continuous employment growth, according to official data.

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