Policy tools to help nation come out of the epidemic shadow
China has plenty of room to use macroeconomic policies to cushion the impact of the novel coronavirus outbreak; and the country’s long-term fundamentals for better economic development remain unchanged, the top economic regulator said on Monday.
“We have the confidence, conditions and capabilities to accelerate the push for a return to the precrisis economic status quo and achieve the annual growth goal for economic and social development,” said Yan Pengcheng, director of the department of national economy at the National Development and Reform Commission.
Yan said the coronavirus is the worst global crisis since World War II, which had a major impact on the economy and society in both China and across the world.
“The negative growth of China’s economy in the first quarter is not historically comparable,” Yan said at a news conference in Beijing. “The economic downturn is not a normal reflection of the fundamentals of China’s economic development, but the result of a serious, sudden incident.”
In fact, China’s business is gradually back to normal with the help of government measures to fight the coronavirus epidemic, as major industrial enterprises had an average work resumption rate of 99 percent by April 14.
Yan said China now faces new challenges due to the global spread of the epidemic and the government will continue to take measures to ensure orderly work resumptions and maintain economic and social stability. “The focus is on a more proactive fiscal policy and a more flexible and appropriate monetary policy to hedge against the epidemic impact.”
He said the government will continue to adopt new measures to support companies, especially the hard-hit small and medium-sized companies, including further reduction of taxes and fees, costs and rents. It will also help exporters to secure orders and market share as well as find new opportunities in the domestic market.
“While the rest of the world continues to deal with the fallout from the forced lockdown of its citizens and the stifling of its economies, the Chinese government is already adapting to a post-pandemic world,” said Lily Ma, head of cloud computing firm Nutanix in China.
Ma said the country has begun mobilizing resources to ensure businesses and economy rapidly recover and are better prepared to survive and thrive any future crises, and the United States-based company has seen new business opportunities in the country’s pursuit of a digital future amid the epidemic.
Yuan Da, the NDRC spokesperson, cited recent reports released by business organizations, indicating the work returns of the US and Japanese firms in China and their willingness to increase investments in the country.
Yuan said China will resolve any issues that foreign companies may face in resuming work and production, and pro-business policies for domestic enterprises shall apply equally to foreign firms.
According to Yuan, the government will further widen market access for foreign investment. China has revised the negative list for three consecutive years from 2017 to 2019, and the number of items on the list has reduced from 93 to 40.
In the next step, China will shorten a negative list that is off limits for foreign investors, pursuing higher-level opening up in the fields of services, manufacturing and agriculture.
A new catalog for encouraging foreign investment will be released this year, with focus on promoting high-quality development in manufacturing, and allowing more foreign investors to enjoy preferential policies.