Covid-19 is an issue but China's economy aim for fast rebound

  • China
  • Saturday, 15 Feb 2020

Employees wearing protective face masks queue as they return to work at an office building in Shanghai. The country’s entrepreneurs on Saturday (Feb 14) are confident and they believe that the government's promises of a quick rebound after the epidemic passes will come to fruition. - AFP

BEIJING/SHANGHAI: The Covid-19 (coronavirus) outbreak that has halted much of China's economic machinery presents a tough situation for the country’s entrepreneurs - but many of them believe that the government's promises of a quick rebound after the epidemic passes will come to fruition.

Cui Kexu on Saturday (Feb 15) said he knows that under normal conditions, his wine factory, cradled between mountains in Yunnan province, can survive for about six months without operating.

The factory, which mass-produces various types of wine and barley wine, closed for the Lunar New Year holiday in January.

But then, just like thousands of other businesses around the country, it remained shuttered for an unspecified amount of time as China grappled with its biggest public health crises in decades.

A new coronavirus outbreak that originated in the central metropolis of Wuhan has led to local governments across the country ordering the temporary shutdown of businesses and the suspension of transport routes in an effort to curb the spread of the disease.

Public holidays were extended, office workers were required to work remotely, and people were asked to only leave home for grocery shopping.

The measures have spurred concerns that China's economy, already under pressure from a trade war with the United States and mounting debt, is going to take a hit.

Investment banks have started lowering their economic forecasts for the first quarter and in 2020. S&P Global Ratings said growth could fall to 5 per cent this year - China's slowest pace in almost three decades.

The central government has tried to placate those worried about the impact.

President Xi Jinping told Indonesian leader Joko Widodo in a phone call Tuesday that not only could China defeat the virus - which has so far killed more than 1,500 people and infected at least 60,000 - but also reach its economic and social development goals.

"I believe China will be more prosperous after overcoming this epidemic," he said, according to Xinhua news agency.

A day later, Xi promised tax cuts and other forms of aid for businesses while giving assurances that there would be no all-out stimulus measures that could increase public debt and pose financial risks.

Cui, like other Chinese entrepreneurs, is quick to voice support for the government-led measures to stop the spread of disease, despite the fact that they are hurting his business.

He said his factory's chances of survival depended on many variables, such as how long the warehouse would have to stay closed, but the priority should be keeping the epidemic under control.

Sun Lijian, director of the Financial Research Centre at Fudan University, said an economic slowdown was certain, but added it was hard to predict how severe it would be.

A worrying outcome of the epidemic is that it has dampened consumers' appetite for just about any product that doesn't serve to keep them safe from the disease, he said.

"The return to normal consumption depends on the timing and speed of our control of the epidemic, but also on how negative emotions can be controlled," Sun said.

To this end, both the government and state media are propagating the message that China has made progress in combating the epidemic and the economy will rebound quickly once the crisis has passed.

"China is best at mobilisation," said Richard McGregor, an analyst at the Australian think tank Lowy Institute. "If there is political commitment at the top combined with the natural commercial instinct of the private sector, then all obstacles standing in the way of ramping up production would just be cleared away."

Ai Jing, general manager of Zhongtiantengfei Trading, a tobacco, tea and liquor distributor in Shaanxi province, said he was expecting an "explosive recovery" once the outbreak passes.

Ai is banking on the resilience of the Chinese people and their capacity to work hard and support domestic businesses.

"We firmly believe that after fighting the epidemic together with the country, we will do good business in the second half of the year," he said. - dpa/Asian News Network
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China , Quick Recovery , Economy , People , Confident


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