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 – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
