Tenacity builds up for rebound

Businesses, banks wait to unleash potential

Even after the city lockdown was lifted, Liu Qi, a taxi driver in Wuhan, Central China’s Hubei Province, said he only had half the number of fares compared with before the coronavirus pandemic, as residents remain on high alert over its resurgence and are choosing to stay home. Ma Ming, manager of a local food market, said that 500 vendors haven’t earned a penny for the past two months, and are still anxiously awaiting a full resumption of business.

In the major manufacturing and export hub of Ningbo, East China’s Zhejiang Province, Chen Jie, deputy general manager of Ningbo Yikade Electrical Appliance Technology Co, said that production lines have been busy producing generators over the past month, but new export orders have been suspended due in part to port closures overseas, and workers could be furloughed if no new orders come in soon.

These are vivid testaments to the depth of the far-reaching economic ramifications of the pandemic, as well as the profound challenges the country faces in making up trillions of dollars lost over the past couple of months and lifting up the economy in the face of lurking uncertainties and risks going forward.

Many in China have billed the pandemic as a once-in-a-century event, that will reshape the global order and economy. With changes come pain. The pandemic has also left many in economic despair.

For taxi drivers in Wuhan, factory owners in Ningbo and farmers in Aksu, the virus is now threatening their livelihood. “I was also scared to death of going back to work, especially as my work requires constant contact with strangers… But if I stay home any longer, my family can’t afford food anymore,” Liu, the taxi driver, told the Global Times.

Under the worst case scenario, the coronavirus could have caused nationwide losses of up to 5 trillion yuan in economic output in the first quarter alone, according to Cao Heping, a professor of economics at Peking University in Beijing.

As the virus continues to spread abroad, uncertainties and risks abound. Apart from the risk of an influx of the virus, there are also risks for Chinese exports, which still account for over 30 percent of China’s total GDP.

Full-fledged efforts

Warning of new difficulties for China’s economic and social development, President Xi Jinping on Wednesday urged “preparedness in mind and work” to cope with prolonged changes in the external environment, and efforts to minimize losses caused by the epidemic.

Xi made the remarks during a meeting of the Standing Committee of the Political Bureau of the Communist Party of China Central Committee, where the country’s top leadership discussed epidemic prevention and control and fully advancing work resumption.

Analysts are also torn over how fast China should speed up its recovery, with some like Cao calling for a faster pace and others urging a “cautious speed.”

“We cannot wait until the virus is completely eradicated to restart the economy, but at the same time, people won’t go out and spend money if they don’t feel safe,” said Dong Dengxin, director of the Finance and Securities Institute at Wuhan University. Dong noted that domestic consumption remains the key to reviving the economy.

There is already a widespread social mobilization underway to save the economy.

Over the past few days, China said it would cut the amount of cash banks must hold as reserves in order to release about 400 billion yuan in liquidity to support small businesses. The country has also been relying heavily on fiscal policies to support the economy. Local governments across the country have also stepped up their own stimulus measures.

More corporations have also joined in the fight over the past few days. On Tuesday, e-commerce giant Alibaba Group announced a plan to support small businesses with loans to as many as 10 million vendors.

Internet celebrities and ordinary consumers are also doing their part by spending. For example, online sales sensation Li Jiaqi and television news anchor Zhu Guangquan have started to help push products from Hubei, and many are buying to support the local economy.

“Just like the battle against the epidemic, the battle to save the economy also requires everyone to chip in. In that regard, China is better positioned than any other country,” Cao said.