China Ambassador Wu Xi: Coronavirus war will not slow China's economic progress

Wu Xi, Ambassador of China to New Zealand. Photo / File

COMMENT:

The sudden outbreak of the Covid-19 epidemic has put China on the front line of fighting the epidemic.

The Chinese Government puts people's life and health first, and under the leadership of President Xi Jinping, we are taking an all-of-government approach, leveraging all-of-nation resources, and mobilising all-of-society forces to fight a people's war against the epidemic.

Thanks to these efforts, the prevention and control of the epidemic is making positive progress. Daily new confirmed and suspected cases of Covid-19 have trended downward overall for two weeks.

Nationwide, discharged patients far outnumber confirmed cases, with around 3000 daily discharged cases over recent days.

With strong and determined leadership, a highly efficient system and fully united population, we have every confidence in winning the war against the Covid-19 epidemic.

The epidemic has undoubtedly affected China's macroeconomic environment, and service industries have been significantly impacted over the Chinese New Year holiday period.

However, the impact on the economy will be short-term and manageable.

The fundamentals of China's long-term economic development remain unchanged, and the long-term positive factors and fundamentals of high-quality growth will not be reversed by the epidemic.

China's economy is big enough and agile enough to fend off short-term risks. China has good leeway to manage investment, consumption, exports, infrastructure, and people's wellbeing.

China's deficit stands at around 3 per cent of GDP, lower than many developed and developing countries, allowing space for effective policies to be implemented.

New types of industrialisation are under way, urbanisation and digitisation are accelerating, and the economy is becoming more information based. People's purchasing power has been suppressed by the epidemic, but will rebound.

Another advantage of China's economy is the world's most complete industrial chains and most efficient supply chains. City and industrial clusters are well distributed along the country's coastal areas and inland areas.

Chinese President Xi Jinping (centre) wearing a protective face mask waves as he inspects the novel coronavirus pneumonia prevention and control work at a neighbourhoods in Beijing. Photo / AP

The economy is also diversified, with strong state-owned enterprises, mixed-ownership enterprises and a thriving private economy. The strengths of China's service industry remain virtually intact and will bounce back after the epidemic.

China's economy also enjoys institutional strength. The market plays a decisive role in the allocation of resources. The Government has strong capabilities in macroeconomic co-ordination and control, resource allocation and emergency response capabilities, as well as sufficient economic, financial and administrative tools at its disposal.

China's ongoing process of reform and opening up will not be disrupted by the epidemic.

The country continues to promote supply-side structural reforms, building free trade zones, further opening the domestic market to foreign capital, and fostering a market environment underscored by fair competition. These efforts will continue to accelerate once the epidemic is under control.

Standing back, it is evident that China's economy has a long and proven track record of resilience. It has withstood previous challenges, such as the Asian Financial Crisis and the Global Financial Crisis. The economy successfully rebounded following Sars in 2003, H1N1 (swine flu) in 2009, and H7N9 (bird flu) in 2013, as well as the devastating Wenchuan earthquake in 2008.

On February 23, President Xi stressed co-ordinated efforts to advance Covid-19 prevention and control, and economic and social development in his important speech delivered at a national tele-conference.

China is committed to establishing an economic and social order aligned with epidemic control, while resuming work and production in an orderly manner. Regions are taking approaches which are relevant and targeted to their specific needs and situations. At the same time, travel and logistics channels have been re-opened and cargo transport restrictions have been lifted.

We will practice prudent and flexible monetary policies and more positive and proactive fiscal policies. Targeted financial services will be provided for the resumption of business and growth in the real economy.

The People's Bank of China has already released 3 trillion yuan (NZ$687b) in liquidity, and 99.5 billion yuan has been earmarked by fiscal departments at varying levels to help fight the epidemic.

A series of fiscal and tax support measures and well-targeted financial measures has also been announced to support small and medium-sized enterprises, to ensure stable production and supply of farm produce, preparing for spring farming, and the prevention and mitigation of disasters.

The Covid-19 epidemic has put China on the front line of fighting the epidemic. Photo / AP

We will expand effective demand and unleash consumption potential by encouraging effective investment and stepping up the construction of new investment projects, overcoming the remaining challenges of poverty alleviation, promoting rural development, and supporting rural settlements and public health systems in combination with epidemic prevention.

We will also support research and development for medicines, drugs and vaccines, biomedicines and medical equipment, and develop 5G networks and industrial internet to meet growing consumer demand.

China will deepen the process of opening up and co-operating internationally, enhance communication and boost co-ordination with our economic and trade partners. We will implement major new foreign investment projects, expand the opening-up of finance and other services, and continue to improve the business environment.

As with every crisis, China will also learn from the lessons of this epidemic. We will draw on the experience of the outbreak to improve our capacity for dealing with major public health emergencies. We will take the opportunity to further modernise our governance capacity. In particular, we will strengthen the ability to manage epidemic prevention and control by law, and improve the national public health emergency management system.

China's efforts to fight the epidemic and boost the economy will effectively reduce the epidemic and economic risks the world may be exposed to.

Today, China's GDP accounts for around 16 per cent of the global total and contributes over 30 per cent of world economic growth.

By fighting Covid-19, China is safeguarding both its own country, and the rest of the world.

Epidemics do not respect national borders. As non-traditional security risks, no country is immune to them or can cope with them in isolation. Global risks require global responses, which is one of the reasons why President Xi speaks of building community with a shared future for mankind.

Only by building this community can we move together to a bright future. China will work actively with other parties at regional and global levels to cope with, and overcome these global challenges.

- Wu Xi is the Ambassador of China to New Zealand.