Economic turning point to appear in March despite coronavirus

By Wei Jianguo Source:Global Times Published: 2020/2/16 12:56:01

A farmer is busy packing corn in the golden light of a fall morning in Jiangjia village, North China's Hebei Province on Tuesday. Local farmers have seen substantial production gains over the past couple of years. Photo: IC

The sudden shock of the novel coronavirus pneumonia (COVID-19) has put great impact on the Chinese economy. Many have worried, or even doubt if China can accomplish its economic goal this year. I believe as long as companies resume production and projects are carried out while containing the spread of the virus, the Chinese economy will see recovery soon. The economic turning point will come at the end of March.

A report named China's Fight Against COVID-19 Epidemic issued by the Shanghai Institutes for International Studies (SIIS) provided an estimation of the turning point of the COVID-19 outbreak. If the number of new infections can be kept low for another two weeks, it can be said that the turning point will be seen in the majority of China. By presenting statistics, the report suggested that the epidemic is increasingly becoming under control in other parts of China, except Central China's Hubei Province.

Containment of the COVID-19 epidemic is heading in a good direction and is a good sign for the country. China has not encountered such a large scale, wide-range virus outbreak before. We should all hope that the turning point of COVID-19 will arrive soon, but we also should not slacken at this moment due to any easing situation. 

The Chinese economy is able to maintain a six percent GDP growth rate. Tourism, transportation and catering will experience an after-effect. Though consumption is likely to be postponed, purchasing power will eventually appear to burst. Moreover, these industries could use more innovation and bring about a revolutionary reform. China has a massive middle class and the second largest consumer market in the world, following the US. Therefore, we don't need to worry about consumption too much. Foreign investment, project operation, supply-side reform, high quality economic growth and opening-up are the ones that demand more attention. 

In the current predicament, China has to control the epidemic and restore production at the same time, which is not an easy job. In order to recover its economic momentum, the country has to find a balance. If it keeps holding back the resumption of production, the first quarter growth may dip too much to rebound. Local governments should give policy support for the return of migrant workers, introduce foreign investment and foreign invested projects and improve business environments. Free trade zones and ports should become a major force to bring in foreign investors.

Delay of the resumption of operations could affect supplying necessary materials. In battling the COVID-19 epidemic, medical supplies serve as our primary weapon. Restarting production under the premise of safety protection should also be a noteworthy objective. It is crucial to guarantee medical material supplies and food supplies, as well as the continuation of major projects. 

As long as we can do a good job on those aspects, by March, China's imports, exports and foreign investment can rise back. And the resilience of the Chinese economy will be revealed. The earlier the economic turning point is restored in China, the more confidence countries around the world will have in the country. 

Containing the virus and resuming production is a test for China and Chinese government officials. China can do both and do them well. This confidence stems from China's institutional advantages. The SIIS report also pointed out that China's whole-of-government approach and efficient social mobilization system are the basic guarantee for victory of the people's war against the virus. China can mobilize the entire country and gain cooperation with the general public. In this way, the turning point of the epidemic can arrive soon. The Chinese government and the country's citizens have faith in it. Measures adopted by the central authorities are very much on time. Confirmed cases outside Hubei have been dropping. 

Combating the COVID-19 outbreak is a people's war commanded by the central government. A turning point of this virus outbreak marks the victory of this people's war and calls for an economic turning point in March.

The author is a former Chinese vice minister of commerce and executive deputy director of the China Center for International Economic Exchanges.


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