By Wei Jianguo Source:Global Times- Illustration: Luo Xuan/GT
Although the novel coronavirus will cause a drop in China’s first quarter economic growth, the impact can be controlled, with the GDP growth rate expected to stay above 5 percent in the first quarter of 2020. The country’s economic growth rate is likely to remain robust at 6 percent for the year.
The coronavirus outbreak during the Chinese New Year holiday season meant the holiday was prolonged. The virus’ impact is mainly concentrated in a few areas, including tourism, transportation, education and aviation.
Some may worry that domestic consumption will be undermined, but I believe this will not be the case. Consumers continue to purchase agricultural products including meat and prices are stable.
The domestic e-commerce and delivery service industry will suffer limited impact. Cross-border e-commerce may be dealt a blow with reduced numbers of orders.
In this unprecedented situation, it is important to maintain strong exports and a robust manufacturing industry. Entrepreneurs and employees are confident that they can map out their own paths. This confidence stems from China’s governance capabilities. It also comes from the belief in China’s institutional advantages. Confidence will unite the Chinese people.
In the second half of 2020, China’s epidemic-hit economy is expected to rebound, with a robust recovery in the third and fourth quarters.
After quelling the coronavirus, China should continue to implement schemes such as the Belt and Road Initiative, free trade zones and free trade ports. Continuing these initiatives is vital for shareholder confidence, investor expectations for Chinese economic stability and China’s business environment. China should also ensure investment projects which involve firms like Tesla and ExxonMobil. Those projects will build China’s global image and boost our own confidence.
China should continue to deepen reform. The epidemic has revealed deficiencies in contingency measures to counter emergencies in some areas. However, China gave full play to its governance capabilities and institutional advantages when the entire country was mobilized. This is something that no other country could ever achieve. Down the road, the country’s institutional potential can be fully released. The Chinese economy’s momentum can surely make a comeback in the second half of 2020.
The author is a former Chinese vice minister of commerce and executive deputy director of the China Center for International Economic Exchanges. [email protected]