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Opinion | In the face of the new coronavirus, China’s economy is more resilient than it was in 2003
- While some have pointed out that the global economy is more vulnerable to shocks to China’s economy than during the Sars outbreak, China today has more effective policy levers, deeper resources and better production capacity and technology
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As the saying goes, “A thousand pieces of gold cannot buy one breath of life”.
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Amid the coronavirus outbreak, Chinese policymakers have rightly prescribed a decisive course of action that puts health above all else. But good medicine often tastes bitter. Containment measures to stop the virus spreading, such as limiting travel and public gatherings, will inevitably have adverse side effects on the economy.
This economic pain is likely to be acute but short-lived. Some activity that is pent up this quarter will be released later in the year, helping the economy recover.
However, not knowing how long and severe the outbreak will be, it is impossible at this point to gauge the ultimate economic impact – not just on China, but the entire world.
If the virus continues to spread, it could endanger the fragile global economy, which was set for an upturn following signing of the phase-one US-China trade deal. Without prudent action, contagion effects and loss of confidence could ripple through global markets and supply chains.
Given the risks, timely global efforts are needed to stabilise the economy. In this regard, China is well placed to leverage its governance capabilities to mobilise a robust, full-team response to the crisis.
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