China’s Economic Fight Against the Coronavirus
There is no doubt that China will win the battle against the coronavirus. In the meantime, however, policymakers must take steps to ensure that the economy functions as normally as possible – without compromising efforts to contain the outbreak – and can bounce back quickly once the crisis is over.
BEIJING – The coronavirus outbreak that began in the Chinese city of Wuhan has spread across the country and beyond its borders, leaving governments at all levels in China scrambling to limit further person-to-person transmission of the virus, now known as COVID-19. Wuhan, with a population of 11 million, is under lockdown. Many provinces have postponed the resumption of work at non-essential enterprises following the Chinese New Year holiday, with residents instead staying indoors in barricaded neighborhoods. Much inter-city and inter-provincial transportation has been halted. And some local governments have even established illegal checkpoints to prevent vehicles carrying industrial products and materials from entering areas under their jurisdiction that contain factories.
Clearly, the outbreak and the extraordinary official measures to contain it have hit China’s economy hard. No one yet knows when the authorities will manage to overcome the epidemic, and what the eventual cost to the economy will be. But the Chinese people have, once again, shown courage and solidarity in the face of a national emergency. There is no doubt that China will win the battle against COVID-19.
When the severe acute respiratory syndrome (SARS) virus hit the Chinese economy in the spring of 2003, everyone initially was pessimistic about the outbreak’s likely economic impact. But as soon as the epidemic was contained, the economy rebounded strongly, and ultimately grew by 10% that year. China is unlikely to be that lucky this time, given unfavorable domestic and external economic conditions. So, with the deadly coronavirus still on the rampage, the Chinese authorities must prepare for the worst.