Solidarity Amid a Global Crisis

COVID-19 has impacted the global economy in ways that few could have predicted at the start of the outbreak. From global airlines struggling to survive through the decline in revenue, even during peak season, to Chinese manufacturing plants staggering their work resumption, every industry has been affected by the virus in some way.

While China has been successful in containing the spread of the virus within its borders, the continued prevalence of the virus in other parts of the world still affects China’s economic recovery. China and Africa have developed strong economic ties. Bilateral relations encompass all spheres from political and cultural to health and security.

Now that China has been able to recover from the rapid spread of the virus earlier this year, in which ways can the country support its strategic partners on the African continent?

With the ever increasing number of confirmed cases and deaths around the world, Africa has struggled to contain the spread of the virus on the continent. Strict lockdown measures have proven successful. However, a lack of sufficient testing kits and other medical equipment has curbed the ability of some countries to halt the spread. The African continent, with a population exceeding one billion people, is expected to grow from the current estimated 17 percent of the world population share to 26 percent by 2050. Issues associated with poverty, such as poor healthcare and densely populated areas with poor living conditions, create an environment in which COVID-19 could have a devastating impact on economies on the continent. The Chinese Government, with its African counterparts, has begun taking steps to prepare them should such an outbreak occur.

From hospital upgrades in Zimbabwe to the distribution of testing kits in Namibia, Chinese embassies in Africa are mobilizing to aid their strategic partners on the continent with effective measures to combat the outbreak. Since the outbreak of the virus began in China, African governments have also made contributions and released statements reaffirming their continued support to China.

African airlines and businesses have continued operations to ensure that China-africa bilateral trade and other exchanges continue to grow even under these unique circumstances.

Whilst COVID-19 continues to spread, with governments around the world working together to halt the pandemic from taking hold in nations that do not have the resources to effectively respond to an outbreak, China and Africa continue a relationship based on the principle of a win-win outcome. Africa supported China throughout the worst of its outbreak; now China is stepping forward to support its developing partners with the supplies and funding needed to recover from the repercussions of the COVID-19.

China has restored relative normalcy following the decline in economic activity that its extended shutdown caused - production across the country is once again reaching pre-outbreak levels. However, as COVID-19 continues to spread and impact major economies in Europe and the U.S., demand for Chinese products is low. While factories may have returned to previous output levels, the decline in demand will see some factories decrease their workforce and production levels to alleviate the impact of expected revenue loss.

PMI Rebounds in March

China’s purchasing manager’s index (PMI) rebounded in March to 52.0 following the expected drop in February to 35.7. As more manufacturers resume operations throughout the country, confidence in the sector is expected to return. However, the decline in global demand has left some managers with cautious industry growth prospects. China reported a work resumption rate for large industrial enterprises of 98.6 percent at the end of March.

Key Economic Indicators

The consumer price index (CPI) rose by 4.3 percent year on year in March 2020, down from 5.2 percent in February. The producer price index fell by 1.5 percent year on year, its biggest drop in 5 months. While it is expected that China will begin its economic recovery from the second quarter, the extent of recovery remains uncertain as the pandemic impacts China’s trade partners.

Global Events Cancelled

Currently, countries across the globe have implemented lockdown measures to slow down the spread of the coronavirus within their borders. Major sporting, political and cultural events, have thus been postponed or cancelled. From the Olympics to the annual sessions of China’s National People’s Congress and the National Committee of the Chinese People’s Political Consultative Conference, key events have been delayed for the first time in decades, governments are forced to take up unique approaches to lead in these tumultuous times. CA

Stable Housing Market

China continued to see a generally stable housing market in March, with home prices in 70 major cities showing milder month-on-month increases, official data showed on April 16.

New home prices in four firsttier cities - Beijing, Shanghai, Shenzhen and Guangzhou - went up 0.2 percent in March, which stayed unchanged month-onmonth in February, according to the data from the National Bureau of Statistics (NBS). Last month, prices of resold housing in first-tier cities edged up 0.5 percent month-onmonth, with the growth expanding by 0.3 percentage points from the previous month, while that in second- and third-tier cities rose 0.2 percent and 0.1 percent monthon-month, respectively.

There was no transaction of both new and resold homes in Wuhan, the city hardest hit by the disease, and their prices were deemed unchanged.

Resurgent Maritime Economy

China’s maritime economy has quickened production resumption with the weather warming up and the novel coronavirus pandemic brought under control, the Chinese Ministry of Natural Resources said.

In a bid to ensure abundant supplies of aquatic products, authorities in Tianjin, Shandong, Zhejiang and Fujian have rolled out measures to support fishery companies in resuming production.

In the city of Binzhou, east China’s Shandong Province, 16 aquaculture firms cut their electricity bills by $1,286 as they were charged favorable power prices.

North China’s Tianjin plans to earmark over $2 million to help its fishery sector regain momentum and ensure rich supplies of aquatic products.

Stimulating Consumption

China has issued coupons to stimulate consumption and hedge downward pressures brought by the novel coronavirus outbreak.

Nearly 50 cities from 16 provinces and regions issued coupons with cumulative value ranging from millions to hundreds of millions of yuan by April 8. In terms of scale, Hangzhou in east China’s Zhejiang Province issued the most coupons among all 47 investigated cities, 10 of which issued more than 100 million yuan in coupons.

In terms of industry, over 80 percent of consumption coupons are related to the catering industry and 42.5 percent are related to the tourism industry, according to statistics from 21 Data News Lab.

Bolstering Foreign Investment

The two sets of policies released in Shanghai on April 10 for attracting foreign investment and stabilizing economic development have reiterated the municipal government’s resolve to further stimulate the economy amid renewed confidence on recovery from the COVID-19 pandemic.

A total of 24 new policies took effect on the day in a bid to further improve the city’s business environment and attract more foreign investors.

The measures are introduced to implement the country’s deepened opening-up policies, step up investment promotion, make business opportunities more accessible to foreign investors and better protect their legal rights, said the municipal government.

Specifically, the city will support foreign investors to enter the industries stressed in the country’s new round of opening-up. Finance and new energy vehicles are likely to be the sectors seeing the first breakthroughs.

Cross-border E-commerce Gains Traction

Cross-border e-commerce is set to play a bigger role in revitalizing foreign trade, judging by the string of measures enacted by the public and private sectors to salvage the segment ravaged by the novel coronavirus outbreak.

China announced plans on April 7 to establish new pilot zones for cross-border e-commerce, support the processing trade, and host an online version of the Canton Fair, its signature export fair, as some of the latest responses to curb the contagion’s effect on trade activities.

In addition to the 59 cross-border e-commerce pilot zones already set up, China will establish 46 new ones and exempt retail export goods in all pilot zones from value-added tax and consumption tax, while encouraging companies to jointly build and share overseas warehouses. CA

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