Experts weigh in on outbreak’s impact on economy
As the novel coronavirus epidemic continues in China, the country’s economic growth has drawn the public’s attention. Let’s take a look at some thoughts on the matter from some key experts.
The novel coronavirus epidemic has limited impact on China’s GDP growth in the first quarter of this year, and will not change the country’s situation and development progress, said Li Feng, co-dean of Shanghai Advanced Institute of Finance.
Li said the economy will rebound under the country’s macro control policy in the second quarter.
The novel coronavirus outbreak has struck some industries, but has also created new opportunities such as shifting consumption from offline to online including shopping, entertainment and education said Liu Mingdi from UBS Investment Bank.
Like the development of online shopping after the SARS outbreak in 2003, this event has moved service purchases online and provided an application scenario for technologies like big data, AI and cloud computing, Liu said.
The epidemic’s effect on China’s economy is a short-term shock, which has little impact on the country’s economy to grow in the long-term, said Wang Chenwei, associate researcher at the Academy of Macroeconomic Research.
Demand is depressed during the novel coronavirus pneumonia outbreak, but will rebound after the outbreak to drive China’s economic upswing, said Yang Liqiang, associate researcher at University of International Business and Economics.
The country’s economy is expected to pick up in the second half of the year, Yang said.
Moreover, the government can take measures such as cutting taxes and giving subsidies to further stimulate consumption, support service enterprises in resuming production and easing employment pressures and providing policy support to manufacturing enterprises and foreign trade enterprises impaired during the epidemic.
The improvement and reform of the disease prevention and control system, as well as development of related industries after the outbreak’s end, will also become an important economic growth engine, Yang said.
Blocking the disease’s spread is the most effective way to reduce the economic impact of the epidemic, said Sheng Chaoxun, deputy director of the industrial institute of the China Academy of Macroeconomic Research.
China should incubate new pillar industries to develop its knowledge, and build up technology-intensive industries including office automation, artificial intelligence, healthcare, new energy and advanced materials, as well as satisfy demands in 5G, intelligent connected vehicles, quantum communication, e-commerce, online clinic and online education, Sheng said.
Moreover, the country also should accelerate to build new infrastructure based around the new generation of information technology, supporting industries and society in networking and digitalization.
The primary forecast now is for a quick recovery of China’s economy as factories gear back up to make up for lost time and warehouses are re-supplied, said Fund Managing Director Kristalina Georgieva.
“In terms of scenarios, the more most likely scenario we now view is a V shaped impact. In other words, sharp decline in economic activities in China, followed by a rapid recovery and a total impact on China relatively contained. Therefore, impact on the world economy also contained,” she said.
“Affected by the novel coronavirus, China’s outbound investment should be further observed in line with the epidemic control progress later this year,” said Loletta Chow, Global Leader of EY China Overseas Investment Network.
Chinese investors should be fully prepared, paying close attention to sectors that support structural adjustment, transformation and upgrading, such as telecommunications, media and technology (TMT), health and life sciences and advanced manufacturing sectors, said Chow.
Source: China Daily