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China: Economic activity resuming

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Chinese employees wearing face masks and protective suits work on a smart chip production line in Sihong in China’s eastern Jiangsu province. AFP

China: Economic activity resuming

China has made considerable progress in resuming economic activity, as the resumption of work and production is accelerating in an orderly manner to fight the novel coronavirus pneumonia outbreak, the country’s top economic planner said on Monday.

National Development and Reform Commission (NDRC) secretary-general Cong Liang told a news conference that more than 70 per cent of major industrial companies in Jiangsu, Shandong, Fujian, Liaoning, Guangdong and Jiangxi provinces have resumed production, and that the ratio exceeded 90 per cent in Jiangsu.

Production has been restored at 67.4 per cent of steelmakers, with a restoration rate of 86.3 per cent at nonferrous metals businesses.

The production rate of urgently needed medical protective goods has expanded to 110 per cent of normal levels, the NDRC said.

Production has been restored at more than 70 per cent of grain supply and processing enterprises designated as providers of grain products during emergency times.

President Xi Jinping stressed on Sunday that the Communist Party of China committees and governments at all levels should continue their unremitting novel coronavirus infection prevention and control efforts and resume work and production in an orderly manner.

Efforts should be made to fully unleash the huge potential and powerful driving force of China’s development and strive to achieve the goals and tasks for economic and social development this year, Xi said.

The NDRC’s Cong said despite the temporary impact of the novel coronavirus on the Chinese economy, there are still many favourable conditions for China to achieve its economic and social development goals this year.

“The outbreak will have temporary and limited economic effects, and it won’t change the country’s sound, long-term economic fundamentals.

“Some consumption demand [that has been held back by the epidemic] is not disappearing. We will see a surge of those types of consumption after the end of the outbreak,” he said.

Cong said many sectors have emerged as beneficiaries of the recent outbreak, including online shopping, online education, telecommuting, online entertainment and smart manufacturing, noting the strong resilience and potential of the Chinese economy.

Officials said the country will provide more proactive fiscal policies and flexible monetary measures to drive the real economy and support a strong economic rebound once the epidemic is contained.

“The [country’s] proactive fiscal policy will be strengthened, and we will launch some new measures,” said Assistant Minister of Finance Ou Wenhan.

More proactive fiscal policies will be enacted to prevent the economic growth rate slipping out of a reasonable range, and new measures will include introducing new policies to cut taxes and fees to boost production resumption and support small and medium-sized enterprises, Ou said.

Meanwhile, the People’s Bank of China – the central bank – is planning to release more countercyclical monetary measures soon, including maintaining “reasonably ample” liquidity and adopting structural monetary policy tools, its vice-governor Chen Yulu said on Monday.

Policy banks like China Development Bank also will strengthen financial support for companies, Chen said.

Former Vice-Minister of Commerce Wei Jianguo said while many companies have resumed work, some of them may feel it hard to restore production capability to normal levels.

“The key issue is the lack of raw materials, as many upstream industries are yet to restore production.

“More efforts are needed to ensure the resumption of production in upstream industries, such as chemical fibre goods required to produce masks,” Wei said.

The country has taken a series of measures to promote orderly resumption of work and production, including tax and fee reductions.

CHINA DAILY/ASIA NEWS NETWORK

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