Minor resurgence of virus won’t affect nation’s recovery
Published: Oct 26, 2020 09:11 PM

Illustration: Xia Qing/GT

As winter draws near, concerns are rising that the risk of COVID-19 resurgence may undermine China's prospects for a hard-won economic recovery, especially after Kashi in Northwest China's Xinjiang Uygur Autonomous Region recently reported an outbreak that medical experts suggest may have connection with the cold weather.

Despite the risk of coronavirus resurgence, China will continue to shake off any fallout from the virus, thanks to the country's effective and now well-developed systems of virus prevention and control. The Chinese economy is expected to grow at about 3 percent in 2020, leading the recovery of the global economy.

Based on big data management, China's response to new outbreaks of COVID-19 is fast and effective. From Beijing's Xinfadi wholesale market to Qingdao city in East China's Shandong Province, China has managed to contain the outbreaks very swiftly. It is therefore highly unlikely that China will see any large-scale resurgence of the disease as a result of the onset of winter.

After detecting one asymptomatic coronavirus carrier on Saturday, Kashi immediately reported the case and started to organize a mass testing program for all its residents, with a plan to finish testing all 630,000 residents within two days. As of 2 pm Sunday, 2.84 million samples had been collected at Kashi's 602 nucleic acid collection points.

The city on Sunday detected 137 asymptomatic virus carriers, all linked to family members of the one asymptomatic case who was detected on Saturday.

With cities and residents now armed with mature coping mechanisms for dealing with potential outbreaks, large-scale suspension of work production or any type of mass panic are unlikely to happen again.

After months of solid prevention efforts, the Chinese economy has shown great resilience and realized better-than-expected growth. In the third quarter, China recorded GDP growth of 4.9 percent. Per IMF estimates, China may be the only major economy to achieve positive economic growth this year.

The momentum is expected to continue, since winter is historically a promising quarter for the Chinese economy, and consumption will get a big boost during the final months of the year. Moreover, China, with its advanced development of 5G technology and infrastructure, is playing a leading role in the 5G era. Chinese consumers are in the midst of a huge trend to replace their smartphones with 5G speed, one of the driving forces behind domestic consumption.

In addition, many countries and regions have seen COVID-19 infection numbers surge again recently. The rising infections have caused production and business suspension in many countries, which, in the short term, will likely boost demand for Chinese products.

On the other hand, challenges persist for China's economic recovery. For instance, banks' insufficient motivation to offer financing for the real economy due to relatively low interest rates, and rising financial pressure on local governments amid the pandemic may lead to weaker investments.

These are the long-term challenges that China's economy needs to address if it wants to continue to recover and grow.

The article was compiled based on an interview with Gao Liankui, distinguished professor and member of academic committee at EU Business School.