How Pandemic Responses Are Shaping The Economic Recovery Of 3 Continents
ARI SHAPIRO, HOST:
Around the world, the coronavirus is infecting more people each day than ever. India reported more than a quarter million new infections today. In some highly developed parts of the world, vaccines are making a dent in new cases, like in the U.S., where half of all adults have received at least one dose. The rates are similar in the U.K. But in other parts of Europe and Asia, the vaccination campaign is going much more slowly. Three of our correspondents in different parts of the world are here to talk about what this means for public health and the health of the global economy. John Ruwitch covers China, Frank Langfitt is in London, and Scott Horsley reports on the economy from here in Washington.
Good to have you all here.
SCOTT HORSLEY, BYLINE: Good to be with you.
JOHN RUWITCH, BYLINE: Hey, Ari.
FRANK LANGFITT, BYLINE: Great to be here, Ari.
SHAPIRO: John, to start with you, China was the first country hit by the pandemic and the first to dig out of the resulting recession. But this country that can quickly build hospitals and highways is taking a lot longer with the vaccine rollout. What's going on there?
RUWITCH: Yeah. I think there's a couple of things happening. One is that there really isn't a huge sense of urgency among people in China to get vaccinated. There aren't that many cases in the country, and life in China for people there looks pretty normal. When outbreaks flare up, also, the government's gotten really good at stomping them out.
The second thing is that they're exporting about half of their vaccines, right? It's vaccine diplomacy, and it's a conscious effort. Remember; China is where the pandemic first was identified, first appeared. And by exporting vaccines, you know, they look like a part of the solution to COVID-19. China is very sensitive about how it's perceived, and they don't want to be seen as part of the problem. But they're targeting a vaccination of 40% of the population by the end of June and more than 60% by the year's end and really ramping up efforts now to get people to go get a shot.
SHAPIRO: On the economy, China reported some impressive numbers last week. Is there more to the story than a straightforward rebound?
RUWITCH: Perhaps. I mean, the number was big. First quarter GDP grew by more than 18%. That's year on year. If you look at it compared to the last quarter of last year, it's less than 1%, though. And in a nutshell, that's just because China has a very low tolerance for COVID, I mean, which means two things. One is that it's very cautious about things like travel, which is huge in Q1, when the Lunar New Year is, and we saw that in the number. No. 2 is that any whiff of a possible outbreak in China, there's going to be lockdowns, restrictions, mass testing, all of which is well and good. The pandemic's under control inside China. But I talked to Louis Kuijs, who's an economist at Oxford Economics in Hong Kong, and he sees a big problem.
LOUIS KUIJS: Economic interaction is crucial for technological progress, for productivity increases. So the longer that we keep our borders shut, you know, the more of a setback we're going to have.
RUWITCH: And by the way, it's not going to be just a problem for China. Others in Asia have been slow to vaccinate. They'll see this problem. And basically all emerging markets are going to have this immunity gap to deal with.
SHAPIRO: All right. To turn to the U.K., the early response to the pandemic there was not great. Prime Minister Boris Johnson ended up in the ICU with COVID-19. More than 125,000 people died. But the country seems to be bouncing back with a vaccine. So, Frank, tell us what's happened there.
LANGFITT: Yeah. It's been a huge turnaround, Ari. As you were saying, last year was mistake after mistake by this government, highest death toll in Europe. Now we're seeing one of the fastest rollouts in any large country on the planet in reference to vaccines. And what seems to happen is many, many months ago, before vaccines were even tested, the government began awarding tens of millions of doses. Then they deployed to the National Health Service, clinics, hospitals. I got mine in a church. And now 32 million people here have already had a first dose. That's out of a country of 67 million. And there's a real sense of momentum here.
SHAPIRO: The U.K. is opening up. You and other Londoners were back in pubs last week. That's helping the economy. But what about the rest of Europe?
LANGFITT: It's a very different story, and some of this comes down to the vaccines. You know, where the U.K. gambled on these untested vaccines, Europe was much more cautious. They tried to bargain with drug companies. And of course, when there was problem with clotting with the AstraZeneca vaccine, some of them paused it. Basically what you've seen is that it's taken a lot longer to get the vaccines out, and you're seeing an effect on kind of the economies. I'll give you an example. Germany is expected to grow at 3.6% this year versus the U.K., which is at 5.3%. And Germany's - in terms of first doses, only around 20% of the population has gotten them, whereas here in the United Kingdom, it's 47%.
SHAPIRO: All right. Scott, in the U.S., vaccines have ramped up really quickly, and that seems to be giving a lift to the economy. And yet the U.S. is still seeing very high rates of new infections. Why is that?
HORSLEY: Yeah. I mean, in the U.S., more than 3 million people are getting shots every day. And as more people get vaccinated, we are seeing more traffic in restaurants and retail stores, which is encouraging for the economy. But some folks may be getting a little ahead of themselves, thinking the pandemic is already beat. And we're still seeing rising infections, rising deaths. Of course, we also have more contagious variants of the virus circulating. And that's why you hear public health officials desperately urging people to keep taking other precautions, like wearing their face mask, for a little bit longer.
SHAPIRO: And on the economic front, you know, the global economy is so interconnected. So, John, when you look at a place like China where the economy is rebounding, how much of that depends on the ability to trade internationally with other countries?
RUWITCH: Some of it does. Trade's actually been a bright spot. I mean, even as economies around the world are underperforming, exports boomed for China during the pandemic, as Americans and others around the world were cooped up and spent less on services and more on stuff, more on imported stuff. And actually, China's imports have been doing relatively well, too, which is good news for everybody else in the world, all the other countries that are increasingly reliant on China's giant market. The pandemic, this vaccine bottleneck - that's what is going to hold things back.
LANGFITT: You know, what John's talking about is very important because in terms of that demand in China, Germany is really - its manufacturing companies are really benefiting from that as well and basically cushioning some of the fact that, you know, domestic demand is so low right now.
SHAPIRO: And so to end with the U.S. economy, Scott, what's it going to take to continue the growth that we've been seeing?
HORSLEY: Yeah. The U.S. economy is projected to grow at the fastest rate in decades this year thanks to that improving public health outlook as well as trillions of dollars in federal spending. But, you know, the U.S. can't afford to ignore what's happening elsewhere. You know, any dangerous outbreak of coronavirus anywhere on the planet could be a threat to us here in the U.S.
SHAPIRO: That is NPR's Frank Langfitt, John Ruwitch and Scott Horsley.
Thank you all.
LANGFITT: Happy to do it, Ari.
HORSLEY: Good to be with you.
RUWITCH: Thank you.
(SOUNDBITE OF TREMOR'S "CARACOL")
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