The Chinese Economy Will Forge Ahead
By Chinese Ambassador Jiang Jiang
2020/03/16

What does the COVID-19 outbreak mean for the Chinese economy? This has become a hot topic in world media. Friends from the Maltese business sector have asked me similar questions. With China being the world’s key growth engine and essential part of the global supply chain, how its economy performs will indeed have an impact on a global scale.

Here are my thoughts on this question.

The COVID-19 outbreak is a major public health emergency, one that is fastest spreading, most widely affecting and most difficult to contain since the founding of the People’s Republic in 1949. China’s economy will take a hit. But I believe that the impact will be short-lived. The fundamentals of the economy will remain strong in the long run.

My confidence comes from the following factors:

First, China’s economic foundation is solid. Development has been our primary focus ever since 1949, and particularly so over the past 40-plus years of reform and opening-up. China has grown into the world’s second largest economy. Last year, its GDP reached US$14.4 trillion, accounting for 16 percent of the world’s total. Over the past several years, China has been generating around 30 percent of the global economic growth.

We have put in place a full-fledged and well-structured industrial system. Today, China is the only country where all economic activities listed in the industrial sections of the United Nations industry classification system can be found. China tops the world in the output of more than 220 of the 500-plus main industrial products.

China has weathered many challenges in the past few decades, such as the Asian financial crisis in 1997, the SARS outbreak in 2003, the global financial crisis and Wenchuan mega-earthquake in 2008. None of them crushed the Chinese economy. It emerged stronger from those difficulties and continued to enjoy fast and stable growth.

What has happened shows that the Chinese economy has great resilience, solid foundation and broad space for maneuver, ready to cope with various types of risks.

Second, China has vast growth potential. With a population of more than 1.4 billion, China has the fastest growing consumer market in the world.

Consumption has become the biggest force driving China’s growth. Final consumption contributed some 60 percent to China’s growth in 2019, making it the anchor for a stable economy. And 490, or 98 percent of the global top 500 corporations have business presence in China.

For the short term, the epidemic will certainly have a negative impact on tourism, transportation, entertainment, catering and some other sectors. But once it is over, there will be a robust release of pent-up consumer demand.

As a result of the nationwide response to COVID-19, “stay-at-home economy” and “cloud-enabled living” are on the rise. New business sectors and forms such as smart manufacturing, unmanned delivery service, online consumption and health products are booming.

China is stepping up the research and development of test kits, medicine and vaccine, which will boost the development of biopharmaceutical, medical equipment and 5G technology. These are expected to become new sources of the high-quality growth we pursue in China.

Third, China is integrating efforts to combat the epidemic and develop the economy. While ensuring the health of the people, the Chinese government has taken broad and effective measures to minimize the impact of the epidemic on the economy.

At a recent meeting in Beijing to coordinate these efforts, President Xi Jinping emphasized that we will focus our work in the following eight area:

· Adopt a region-specific, risk-based and targeted approach in resuming work and production.

· Enhance macro policy regulation.

· Take multi-pronged measures to ensure stable employment.

· Meet poverty alleviation targets.

· Give support to businesses for resuming work and production.

· Start spring farming in a timely way.

· Ensure basic livelihood.

· Keep foreign trade and investment stable.

Following these guidelines, and as work and production is resumed in an orderly manner across the country, the enormous potential and strong driving force of the economy will be unleashed.

Confronting COVID-19 is a big test for us. We have the confidence to win the battle because we have the strong leadership of the Chinese government. We have a system that enables us to mobilize resources to accomplish large undertakings. And our people are united as one. We will meet our development goals and make even greater contributions to world economy.

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This article was published in the Times of Malta on 15 March, 2020.

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