‘Quick rebound’ foreseen for economy of China after coronavirus outbreak subsides
THE novel coronavirus epidemic will not alter the fundamentals of China’s foreign trade, foreign investment and core position within the global industrial chain from a long-term perspective, commerce officials and business leaders said.
Even though China’s foreign trade, foreign investment and consumption have been hit by the outbreak, the impact will gradually ease once the virus is contained in China, said Ministry of Commerce’s Department of Trade in Services and Commercial Services director-general Xian Guoyi.
“Production and consumption will return to normal in China after the epidemic,” he said, adding that more companies will replenish inventory and individuals will consume products in a restorative or even compensatory manner.
Denis Depoux, managing director for China of the global consultancy Roland Berger, said: “Based on the experience from the Sars crisis, we can foresee a quick rebound of the Chinese economy in terms of recovery of inventory, restocking demand, uplift of consumption of goods and services after the freeze.”
Economic growth will also gain strong fiscal and monetary support from the government, he said. Local infrastructure investment, financed by special bonds – as in last year – will support the economy.
Xian said new business modes that emerged amid the epidemic will develop at a fast pace and the virus will not change China’s determination to deepen its opening-up and international cooperation.
The government has issued policy measures to help manufacturers that export their goods resume production, improve the government service for foreign companies, stimulate domestic consumption and deal with foreign trade restrictions from concerns about the epidemic.
Xian said the Ministry of Commerce has already strengthened coordination with international organisations, trading and investment partners, and urged related parties to comply with World Trade Organisation rules, respect the professional opinions of the World Health Organisation and facilitate the development of major projects related to the Belt and Road Initiative.
Honeywell International Inc, the US-based industrial conglomerate, said its 21 plants across China have resumed production.
Honeywell China Co Ltd president Scott Zhang said the facilities are taking orders from domestic clients and shipping products to other global destinations.
Asia Pulp and Paper Co (APP), the Indonesian paper product manufacturer, said more than 80 per cent of its 30 plants had resumed work in China by the end of last week and the group will continue to invest in the country.
Consumer awareness of and consumption of healthcare and personal hygiene products will surge after the outbreak, and related industries will usher in a period of faster growth, said APP China vice-president Zhai Jingli.
The group plans to invest 45 billion yuan ($6.41 billion) in Rudong county, Jiangsu province, to build a manufacturing plant producing high-end paper-made items over the next decade.
With nearly 10 billion yuan of investment, the base’s first phase is scheduled to be operational next year and it will be able to produce 780,000 metric tonnes of high-end paper goods annually.
China will expand market access for foreign investment and continue to reduce the articles of the national negative list and also of the list for the pilot free trade zones across the country, said Ministry of Commerce’s Department of Foreign Investment Administration director-general Zong Changqing.
As the epidemic is largely a regional and short-term event, the preparations for the 127th China Import and Export Fair are proceeding as planned. The fair is scheduled to start on April 15 in Guangzhou, Guangdong province, the event’s organiser said.