The International Monetary Fund (IMF) supports China’s efforts to tackle the outbreak, and is confident that China’s economy “remains resilient,” IMF Managing Director Kristalina Georgieva has said.
by Xinhua writer He Fei
BEIJING, Feb. 16 (Xinhua) — An extended new year holiday has slowed down travel and business activities in China due to the unexpected novel coronavirus outbreak.
While adopting timely, comprehensive and stringent measures to combat the epidemic, China has announced its policy toolkit to shore up businesses. Analysts and business insiders of many countries have voiced their confidence that the Chinese economy will be left unscathed in the long run.
The International Monetary Fund (IMF) supports China’s efforts to tackle the outbreak, and is confident that China’s economy “remains resilient,” IMF Managing Director Kristalina Georgieva said on Twitter Feb. 3.
PRODUCTION RESUMPTION
On Feb. 10, the date of production resumption set by many provinces, transport networks saw increased passenger flow, a slew of wholesale markets and supermarket chains returned to normal operation, and manufacturers resumed operations with precautionary measures taken to prevent a further transmission of the virus.
Employees work at the workshop of Faurecia (Chongqing) Automotive Parts Co., Ltd, a Sino-French joint venture, in southwest China’s Chongqing Municipality, Feb. 12, 2020. (Xinhua/Tang Yi)
More than 80 percent of the 23,000 manufacturing subsidiaries of 96 centrally-administered state-owned enterprises have resumed production as of Wednesday, except those required by local governments to delay work resumption, according to the State-owned Assets Supervision and Administration Commission of the State Council.
By Wednesday, 83 percent of power grid and power generation companies have resumed work, while in the oil and petrochemical industry, the resumption rate reached 96.8 percent. Meanwhile, work on related key national projects have also begun to move forward in an orderly manner, the commission said.
More enterprises have adopted flexible forms of returning to work according to their own characteristics.
An employee works at a modern agricultural park in Weifang, east China’s Shandong Province, Feb. 14, 2020. (Xinhua/Guo Xulei)
Foreign companies in China also joined the rank. European plane maker Airbus, for instance, in a statement released on Tuesday, announced the decision to gradually increase production at its China division.
According to a survey conducted by the Shanghai Association of Foreign Investment earlier this week, more than 80 percent of the 54 foreign companies surveyed in Shanghai have fully or partially resumed production.
Administrative measures have been offering a helping hand in time to businesses. China’s central bank on Monday issued special loans totaling 300 billion yuan (about 43 billion U.S. dollars) at a preferential rate to policy and commercial banks, aiming to support business activities directly linked with epidemic control.
Fiscal authorities have also rolled out measures, such as supplying logistic services and financial assistance, to support small and micro-enterprises, which are a key force to underpin the labor market and protect economic vitality.
On financial markets, China’s central bank has added a total of 1.7 trillion yuan (about 243 billion dollars) into the banking system to boost liquidity and stabilize market expectations.
Stephen Roach, a senior fellow at Yale University’s Jackson Institute of Global Affairs, said he is “very optimistic on the prospects for the Chinese economy,” and “there’s plenty of opportunities for fiscal and monetary stimulus.”
Tan Kok Wai, the Malaysian government’s special envoy to China, said the Chinese government’s effective handling of the outbreak will build business confidence and push everyone from small businesses to state-owned companies to move beyond this temporary problem.
“The message is clear — this will pass and it will be back to business as usual,” he said.
Aerial photo taken on Feb. 16, 2020 shows a China-Europe freight train departing from Zhengzhou Station, central China’s Henan Province. (Xinhua/Li An)
IMPACT ONLY TEMPORARY
Noting the epidemic would pose an economic shock to China, experts have said they believe the world’s second largest economy has leeway to cushion the short-term impact and sustain stable growth.
“We believe the coronavirus is a one-off negative shock, which should not alter the long-term growth trajectory of China’s economy,” United Bank of Switzerland (UBS) economists said in a research note on Tuesday.
“As the virus outbreak is contained and economic activities normalize, we see pent-up demand being released and businesses recover,” they said.
The epidemic will not affect China’s cross-border investments in the long run, though it will have a short-term impact on the Chinese economy, especially in the first quarter, said Horst Loechel, a professor of economics at the Frankfurt School of Finance and Management.
Business activities such as mergers and acquisitions, foreign direct investment, and private equity investment are related to the real economy, and the current epidemic will not have an impact on the long-term forces behind these investments, Loechel said.
An employee transfers polypropylene material for medical use with a forklift at Lanzhou Petrochemical Company in Lanzhou, northwest China’s Gansu Province, Feb. 12, 2020. (Xinhua/Chen Bin)
Khairy Tourk, an economics professor at the Illinois Institute of Technology in the U.S. city of Chicago, told Xinhua that “one positive thing about the Chinese economy is that it has already developed a digital economy.”
His remarks echoed the recent booming of a “homebody economy” across China, as online education, online healthcare, e-commerce, and working from home are on the rise. China’s tech giant Tencent has upgraded its live-streaming and online conference services, as such demand has been growing in recent days.
“Chinese people are very inventive and they have taken so many steps to lessen the effect of the spread of the disease,” Tourk said. “The country is moving in the right direction as to dealing with its crisis.”
GLOBAL DEMAND ROBUST
China’s long-term trends of moving towards a more consumption-oriented economy and of a rising services share in the overall structure should continue, UBS economists noted. Businesses are showing unabated interest in tapping the market that is too big to be missed.
A staff member picks up goods for online orders at a store of Hema Fresh in Beijing, capital of China, Feb. 14, 2020. (Xinhua/Ju Huanzong)
“China plays an important role in the international trading system. That role will evolve but I don’t see reliance changing,” said Doug Barry, senior director of communications and publications at the U.S.-China Business Council, who added that U.S. businesses “remain bullish” on China.
“Those taking a long-term view are betting the economy will continue to grow faster than in most other markets and that the Chinese consumer in particular will propel growth,” Barry said. “Companies want to be in China. They need to be in China.”
Urging British businesses to tap the potential of the Chinese market after Brexit, Colin Rainsforth, director of British food and drink export and marketing firm Absolute Advantage, said China is a big market with rapid growth and an increasing number of middle-class consumers who are keen for high-quality goods.
The timely and decisive measures of China to lessen the economic impact “will be beneficial both to China and the world economy,” he said, adding that isolating China due to the coronavirus “is not the solution and will only create more obstacles to world trade.”
A student takes an online class at home in Handan, north China’s Hebei Province, Feb. 10, 2020. (Xinhua)
Tan, the Malaysian envoy, noted that China has remained Malaysia’s largest trading partner for 11 consecutive years and accounted for 17.2 percent of Malaysia’s trade in 2019, and that bilateral trade “will recover with a higher peak within reach” after the epidemic.
Jorge Valenzuela, president of the Chilean Federation of Fruit Producers, said that China accounts for nearly 30 percent of their exports, and that their “ties with China are deep and long-standing … so this situation is not going to stop or slow down bilateral relations.”
Tourk, the U.S. professor, called for worldwide efforts to fight the disease. “Nothing spares cooperation among nations like emergencies that deal with questions of life and death,” he said. “A healthy China means a healthy world economy.” Enditem
(Xinhua reporters Xu Yuan, Deng Xianlai, Xiong Maoling in Washington, Xu Jing in Chicago, Lin Hao in Kuala Lumpur, Zuo Wei and Shen Zhonghao in Frankfurt, and Zhu Sheng in Berlin also contributed to the story.)
(Video reporters: Deng Xianlai, Jin Yuelei, Xu Yuan, Zhang Xingjun, Jiang Chao; Video editor: Zhu Cong)
OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.
However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.
The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.
Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.
The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.
The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.
This report by The Canadian Press was first published Oct. 17, 2024.
OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.
In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.
The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.
Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.
In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.
It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.
This report by The Canadian Press was first published Oct 16, 2024.
OTTAWA – Statistics Canada says manufacturing sales in August fell to their lowest level since January 2022 as sales in the primary metal and petroleum and coal product subsectors fell.
The agency says manufacturing sales fell 1.3 per cent to $69.4 billion in August, after rising 1.1 per cent in July.
The drop came as sales in the primary metal subsector dropped 6.4 per cent to $5.3 billion in August, on lower prices and lower volumes.
Sales in the petroleum and coal product subsector fell 3.7 per cent to $7.8 billion in August on lower prices.
Meanwhile, sales of aerospace products and parts rose 7.3 per cent to $2.7 billion in August and wood product sales increased 3.8 per cent to $3.1 billion.
Overall manufacturing sales in constant dollars fell 0.8 per cent in August.
This report by The Canadian Press was first published Oct. 16, 2024.
