China’s focus now on reviving economy, seeking balance between virus controls, work resumption

Source:Global Times Published: 2020/2/17 21:03:40

Nation seeks balance between virus controls, work resumption

A worker of HBIS Group Tangsteel Company patrols at the steel coil storage area in Tangshan, north China's Hebei Province, May 31, 2019. (Xinhua/Mu Yu)

With growing signs that the COVID-19 outbreak is being tamed, the focus is now on broad-based efforts to steady the Chinese economy, market watchers said, highlighting the debate about a balance between epidemic controls and the restart of economic activity, and between policy support and the risk of over-stimulating the economy. 

New confirmed infections outside Central China's Hubei Province, the epicenter of the novel coronavirus pneumonia, fell for the 13th day in a row as of Sunday, according to figures released by the National Health Commission on Monday.

In another sign, the daily number of patients discharged from hospitals in Hubei for the first time topped 1,000 on Sunday. Along with easing virus fears come calls for measures to revive the virus-battered economy.

On the micro level, industries and businesses have spared no effort to restore activity. A notable example is Haidilao, one of the country's most popular hotpot chains, that has announced that both its physical stores and food delivery services have resumed operations.

Still, analysts ask for due attention to be given to contentious pro-growth efforts. 

"I personally reckon that what's most needed now is not [the push to] stimulate the economy, but to get the economy back on track in an orderly manner," Wu Jinduo, head of fixed income at the research institute of Great Wall Securities, told the Global Times on Monday.

Other than Hubei, the nation's 30 provincial-level regions have all arranged for companies to resume work and production, Chen Da, an official with the National Development and Reform Commission, said on February 9 at a press conference of the joint prevention and control mechanism of the State Council on Sunday.

The joint prevention and control mechanism also put up a notice earlier this month calling for enhanced efforts to scientifically prevent and contain the virus while handling the restart of work and production well.

The regions outside of Hubei that have large populations but are less hit by the disease bear an unshakable responsibility for the orderly restart of work and production, Wu suggested.

She pointed out that it's not easy to handle the balance between epidemic controls and the resumption of work on the side of local governments and businesses, especially the latter, which are under great pressure to be mindful of potential faults in recommencing operation.

Some local governments and businesses appear to have gone too far in putting virus prevention on top of the push to restart activity, Wu stressed, calling for relevant authorities to be held responsible for formalism that weighs on the revival of the economy.

Another point of contention is expectations over more fiscal support and monetary easing that stoked concerns over rising leverage and their spillover effects on the property market. 

The People's Bank of China, the country's central bank, lowered the interest rate on one-year medium-term lending facility (MLF) loans worth 200 billion yuan ($28.65 billion) by 10 basis points to 3.15 percent.

Expecting a cut of 10 basis points in the benchmark loan prime rate around the corner, Lu Zhengwei, chief economist at Industrial Bank in Shanghai, said that while some regions have announced plans to allow delayed payments for land transfers, home prices are still expected to be reined in.

As Wu put it, signs of property easing in some areas might only be an expedient move to respond to the downward pressure on local economies amid the virus outbreak. Nationwide, it will still be the case that housing is for living in instead of speculation.

Newspaper headline: China's focus now on reviving economy


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