Coronavirus outbreak

China can meet its economic growth target for 2020: Xi

Patients in a temporary hospital in Wuhan, which was converted from Wuhan Sports Centre, on Monday. The authorities throughout China have implemented various curbs on travel and movement to contain the outbreak, which has killed 1,868 people in mainl
Patients in a temporary hospital in Wuhan, which was converted from Wuhan Sports Centre, on Monday. The authorities throughout China have implemented various curbs on travel and movement to contain the outbreak, which has killed 1,868 people in mainland China as of Monday, with a total of more than 72,400 cases.PHOTO: XINHUA

Chinese leader says impact of outbreak is temporary, economy remains resilient

BEIJING • China can meet its economic growth target this year despite the impact of the coronavirus outbreak, state media quoted President Xi Jinping as saying yesterday.

In a telephone conversation with British Prime Minister Boris Johnson, Mr Xi said the economy remained resilient as efforts to control the outbreak reached a critical stage, Xinhua news agency reported.

He emphasised a similar point in a phone call with French President Emmanuel Macron yesterday, saying the impact on the Chinese economy is "temporary".

"We believe that through hard work... we will still be able to achieve the economic and social development goals and tasks that we have set out," he added.

As drastic containment measures taken by China disrupt production and supply chains, a vice-chairman of the state assets regulator said yesterday the impact on various industries will mainly show up this month.

The authorities throughout the country have implemented various curbs on travel and movement to contain the outbreak, which has killed 1,868 people in mainland China as of Monday, with a total of more than 72,400 cases. Officials reported more than 1,880 new cases on Monday - the first time the daily figure has fallen below 2,000 since Jan 30.

The measures have hampered the ability of companies to resume production, receive raw materials or send products to clients, disrupting their operations.

"(The outbreak) in turn had a comparatively controllable impact in January operations and a major impact in February," Mr Ren Hongbin of the State-owned Assets Supervision and Administration Commission (Sasac) said during a press briefing, adding that consumer-oriented firms and firms at the end of industrial chains have been hit the hardest.

More than 95 per cent of central government-controlled companies in key sectors such as oil, communication, power and transport are in operation, Mr Ren said.

 
 

Sasac spokesman Peng Huagang said at the briefing that the regulator will encourage centrally held firms to extend or revise contracts with small and medium-sized companies that are struggling to deliver goods or make payments.

Capital Economics said in a report that it is now all but certain that China's economy will contract in quarter-on-quarter terms in the first quarter. "We have pencilled in a fall in output of 2.5 per cent," Mr Neil Shearing, group chief economist, wrote.

He said the virus has hit global supply chains and could have longer-term repercussions. "One plausible consequence is that it could accelerate the process of deglobalisation that is already spreading through the world economy and which we have previously warned about."

Hong Kong's Chief Executive Carrie Lam yesterday increased a relief fund from HK$25 billion (S$4.5 billion) to HK$28 billion.

Last week, she announced one-off payments to businesses across the Asian financial hub and the Hospital Authority. One of the 62 patients in the city has died from Covid-19.

South Korean President Moon Jae-in said yesterday that the government should make an all-out effort to cushion the economic impact from the coronavirus outbreak, boosting expectations of further monetary easing. The government "shouldn't quibble over whether anything is unprecedented or not", he said. "We should take every possible measure we can think of."

 
 
 

Investors speculated that stimulus measures being rolled out could include an interest rate cut when the Bank of Korea meets on Feb 27.

Taiwan Premier Su Tseng-chang asked Legislative Speaker You Si-kun yesterday to "swiftly pass" a Bill which will see the Cabinet allocating NT$60 billion (S$2.77 billion) for affected businesses and residents. "The Cabinet will submit the Bill to Parliament by Thursday," Mr Su said.

About one third of the emergency budget will go to the Ministry of Transportation and Communications, under which the tourism bureau has been hit hard. Taiwan has 22 confirmed cases so far.

Japan last week launched a 15.3 billion yen (S$194 million) package that included funds for the development of a vaccine and treatment of the illness, as well as economic support for smaller businesses such as tourism firms. About US$4.5 billion (S$6.3 billion) will be set aside by Japan Finance Corporation and other entities for emergency loans and loan guarantees.

Another 88 people from the quarantined Diamond Princess ship tested positive for the coronavirus, the Japanese authorities said yesterday, bringing the total on board to 542. There are at least 74 cases domestically in Japan.

REUTERS, AGENCE FRANCE-PRESSE , THE CHINA POST/ASIA NEWS NETWORK

 
A version of this article appeared in the print edition of The Straits Times on February 19, 2020, with the headline 'China can meet its economic growth target for 2020: Xi'. Print Edition | Subscribe