Global EditionASIA 中文双语Fran?ais
Business
Home / Business / Macro

Economy still on even keel, say experts

By Hu Yuanyuan | China Daily | Updated: 2020-02-04 06:46 菲律宾申博太阳城官网
Employees work on a production line of an automaker in Qingzhou, Shandong province. [Photo by Wang Jilin/for China Daily]

SIIS report: Importance of resilience as a key factor cannot be underestimated

The impact from the novel coronavirus outbreak will be short-term and not leave any lasting scars on the robust Chinese economy, leading economists said on Monday.

Xu Dingbo, a senior economist at the China Europe International Business School, said recent decision of the World Health Organization to term the virus outbreak as a global emergency will not lead to a substantial increase in China's economic risks, due to the central authorities' timely intervention measures.

The WHO on Thursday declared the novel coronavirus epidemic as a Public Health Emergency of International Concern, or PHEIC, citing confirmations of human-to-human infections in other countries.

"The most effective way to reduce any potential impact on the economy is to keep the epidemic under control since the PHEIC status will become due within three months and the WHO could change it at anytime, depending on the subsequent developments," said Xu. "Meanwhile, the central authorities have spared no efforts in restoring the business confidence."

The People's Bank of China, the central bank, launched a slew of measures on Saturday to stabilize the economy, including credit easing and liquidity injection, especially for private, small and micro enterprises as well as manufacturing companies.

According to a report published by the Shanghai Institute for International Studies (SIIS), 27.3 billion yuan ($4 billion) had been provided by governments across all levels as subsidies for controlling the epidemic as of Jan 29.

"The epidemic will drag down the first-quarter GDP growth by 1 percentage point, based on our primary calculations," said Xu Gao, chief economist with Bank of China International Ltd. "If China can keep the epidemic well under control in February, the overall impact on the annual GDP growth rate will be limited, probably around 0.2 percentage point."

The epidemic, Xu stressed, does not curtail all economic activities but only changes the patterns. The restrained consumption demand, such as travel and shopping, will see an obvious rebound once the epidemic is over, he said.

"The growth potential of China's economy is yet to be released, and there are still many policies the government can implement," Xu said.

Lukman Otunuga, a senior research analyst with FXTM, an international foreign exchange platform, echoed similar views.

"We expect the epidemic's economic impact to be short-lived," said Otunuga. "However, considering the expected decline in production, dampened retail activities, as well as travel restrictions, the cautionary mood over the global economic outlook appears warranted for the time being."

China's better-than-expected expansion in its January non-manufacturing Purchasing Manager's Index, along with the efforts by the authorities to contain the virus outbreak, will help push back against some of the fears surrounding the epidemic's impact on the country's economy, Otunuga said.

"Most of the negative shocks would reverse once it becomes clear that the virus can be effectively contained and sentiment impact fades," said David Wang, head of China economics at Credit Suisse, a Swiss multinational investment bank and financial services company.

However, the virus outbreak may also have some long-term impact. The quarantining of cities is unprecedented and will trigger a supply-side shock by negatively impacting labor productivity of Hubei in particular and surrounding provinces in general, the experts said.

"For supply-side shocks, recovery to the pre-outbreak level might take longer," Wang from Credit Suisse said.

According to the SIIS report, the novel coronavirus epidemic poses direct harm to three main sectors: the service sector, especially consumer industries such as tourism, catering, entertainment and logistics; the manufacturing sector, typically mobile phones, automobiles and electronic industries since Wuhan is a manufacturing center in China and there is no definite timeframe for resumption of operations, which may disrupt the global industrial chains to some extent; and the trade sector, due to potential cuts or even shutdown of airlines, sea routes and borders by some countries as a result of the prevailing panic or geopolitical considerations.

"Labor-intensive enterprises and small-and medium-sized enterprises may suffer more, given the epidemic's impact on the supply of migrant workers and logistics services," said Zhang Haibing, director of the Institute of Global Governance of the SIIS.

Nevertheless, the resilience of China's economy cannot be underestimated. Even in the short term, the epidemic is not just about negative effects on the economy, as it has also benefitted industries such as electronic commerce, online games and entertainment, as well as medical services, the SIIS report said.

"In the long run, the epidemic cannot undermine the nation's huge potential in consumption, urbanization, and emerging industries such as 5G and artificial intelligence as it (China) is the second-largest economy in the world," said Zhang.

Zhou Lanxu contributed to this story.

Top
BACK TO THE TOP
English
Copyright 1995 - . All rights reserved. The content (including but not limited to text, photo, multimedia information, etc) published in this site belongs to China Daily Information Co (CDIC). Without written authorization from CDIC, such content shall not be republished or used in any form. Note: Browsers with 1024*768 or higher resolution are suggested for this site.
License for publishing multimedia online 0108263

Registration Number: 130349
FOLLOW US
 
网站地图 ag娱乐登入 澳门百家乐 ag真人娱乐 申博现金网址
菲律宾太阳网娱乐 申博代理官网正网 菲律宾申博开户登入 太阳城注册开户
澳门金沙娱乐场 ag真人娱乐 太阳城代理 申博登入网址
澳门赌场 申博app下载 申博代理开户 盛618网址
太阳城娱乐登入 澳门大三巴赌场 777老虎机游戏登入 太阳城亚洲