China’s top officials are meeting in Beijing on Monday to set plans for how to make the most of the country’s effective COVID-19 response and burgeoning economic momentum, just days after the U.S. spike in coronavirus cases reached a new single-day record.
In a new interview, billionaire fintech investor Glenn Hutchins warned that U.S. mishandling of the pandemic has driven its economy into a recession and stalled its recovery, leaving the nation “in a very bad place” compared to top economic competitor China.
“We saw the Chinese economy is starting to grow again,” Hutchins, the chairman of investment firm North Island, told Yahoo Finance in an interview that aired as part of its annual “All Markets Summit” on Monday.
“We’re in a very bad place with respect to how we manage the pandemic and the economic consequences of it are manifest, and they're going to be long term and they need to be addressed,” he says.
“We're not in a period of recovery — you shouldn't confuse the bounce back as one of recovery,” adds Hutchins, co-founder of Silver Lake Partners and former special adviser to President Bill Clinton on economic and health-care policy.
‘The recession is setting in’
The Chinese economy expanded at 4.9% rate in the July-September quarter, the country announced last week. The growth rate nearly matches the 6.1% expansion that the country reported pre-pandemic for the calendar year of 2019.
Meanwhile, U.S. economic output fell 5.0% in the January-to-March quarter and at a record rate of 31.4% in the April-June quarter, as coronavirus shutdowns forced swathes of the economy to operate at a limited capacity.
Economists expect growth to come back at a blistering 30% rate for the July-September quarter, Bloomberg reports. But Hutchins said a strong third quarter will not make up for the losses suffered earlier in the year.
“The depression is over and now the recession is setting in,” he says.
Hutchins urged Congress to pass “absolutely vital” stimulus that would help address the spike in unemployment caused by the pandemic.
A stimulus deal remained out of reach on Sunday, when Democratic House Speaker Nancy Pelosi and White House Chief of Staff Mark Meadows each exchanged criticism for the other’s failure to make a compromise.
Senate Republicans deserve some of the blame, Hutchins said, claiming they’ve prioritized the confirmation of Supreme Court nominee Amy Coney Barrett and on principle are reluctant to support further government spending.
“Valuable time was wasted,” Hutchins says.