China’s economy withstands epidemic shocks

A child chases a kite in Hohhot, north China’s Inner Mongolia Autonomous Region, March 16, 2020. Citizens in the city are advised to wear marks when they go outside to enjoy spring time. Photo by Ding Genhou/People’s Daily Online

By Lu Ya’nan, People’s Daily

China’s economy has withstood shocks caused by the novel coronavirus (COVID-19) in the first two months of the year, Mao Shengyong, spokesperson of the National Bureau of Statistics (NBS) told a press conference held by the State Council Informational Office on March 16.

China’s value-added industrial output fell 13.5 percent year on year during the January-February period. Fixed-asset investment went down 24.5 percent, while retail sales of consumer goods dropped 20.5 percent, according to the NBS.

While the epidemic has caused relatively big shocks to the economy, the impacts are largely “short-term, external and controllable,” said Mao, who is also director general of the Department of Comprehensive Statistics with the NBS.

Chinese people’s livelihood is effectively ensured and social stability maintained, Mao noted, adding that China’s improving economic fundamentals and the trend of upward momentum in the long term have not changed.

The country’s economic scale has not shrunk as there is high demand for production. China’s GDP approached 100 trillion yuan ($14.28 trillion) in 2019 and the production of major industrial products topped the world for years, which lays a solid material foundation for the country to respond to emergencies.

While the country was hit hard by COVID-19 in the first two months, major indicators and volume of production remained at a high level.

From January to February, the total output value of China’s industrial enterprises above designated size reached 11.5 trillion yuan; the total retail sales of consumer goods exceeded 5.2 trillion yuan; the fixed asset investment exceeded 3.3 trillion yuan.

China’s strong economic resilience has not changed as basic industries are well safeguarded and epidemic prevention materials sufficiently supplied.

The epidemic did not interrupt the production of important industries directly concern the country’s stability and the people’s wellbeing. In addition, the expansion of the production of epidemic prevention materials has fully satisfied the need for virus control.

From January to February, the number of masks produced by industrial enterprises above designated size increased by 2.9 times year-on-year, and the average daily output of masks reached 116 million pieces, indicating that China’s strong supply capacity has met the demand for medical supplies.

Demand and supply remained balanced as there are affluent supplies of living necessities and goods for public use. During the first two months, the basic livelihood of the Chinese people was effectively guaranteed, and consumer goods maintained a sound growth overall. Retail sales of meat, poultry and eggs increased by 37.8 percent, and that of vegetables by 27.1 percent.

New growth drivers kept increasing prompted by the sound development of the internet economy. The internet has played a very constructive role in allocating and distributing materials and facilitating telemedicine services.

From January to February, the online retail sales of physical goods increased by 3 percent year-on-year, accounting for 21.5 percent of the total retail sales of consumer goods. The growth rate represents an increase of 5 percentage points over the same period last year. The output of 3D printing equipment, smart watches and other electronic products increased by more than 100 percent.

China’s confidence to meet the year’s targets for economic growth has not changed as the macro policies have effectively hedged the impact of the epidemic. To bring the economy back to normal, the central government has rolled out a series of policy measures to support epidemic control and promote work resumption, Mao said, adding that these measures are gradually taking effects.

At present, China faces a number of economic challenges. The epidemic has exerted certain impacts on the economy in the first quarter, especially the first two months. Due to the fast-spreading epidemic in foreign countries, the global financial market and commodity prices are relatively volatile and market expectations are unstable, indicating a possible slowdown of global growth.

However, there are favorable conditions for China’s economy to maintain stability. The country is consolidating the progress in the battle against COVID-19; enterprises across the country have resumed production in an orderly manner; the endogenous power of the Chinese economy will continue to be released as the epidemic has been brought under control; some previously suppressed economic activities will also go back to normal.

“Since mid to late February, the resumption of production been accelerating, which indicates the economic indicators in March will be much better than those in the January-February period, and the market in the second quarter will bounce back,” Mao analyzed, saying that the Chinese economy will become more stable in the second half of the year and he is confident in the stable and healthy performance of the economy throughout the year.

Tourists go sightseeing at a rapeseed flower field in Wujiao township, Ruichang, east China’s Jiangxi province, March 15, 2020. Photo by Zhang Xuxiong/People’s Daily Online

A man works on a production line of a special vehicle manufacturing company in Lianyungang, east China’s Jiangsu province, March 16, 2020. Photo by Wang Chun/People’s Daily Online