40 BEIJING REVIEW MARCH 26, 2020 http://www.bjreview.com
BUSINESS MARKET WATCH
T
he Chinese authorities are planning
stronger macro policies to shore up the
economy and keep employment stable
as the latest data on industrial output, retail
sales and investment showed across-the-board
contraction in the Ķ rst two months due to the
novel coronavirus disease (COVID-19).
The value-added industrial output, an
important economic indicator, fell 13.5 per-
cent year on year during the January-February
period. Fixed assets investment went down
24.5 percent, while retail sales of consumer
goods dropped 20.5 percent, according to the
National Bureau of Statistics (NBS).
Early epidemic control efforts by the gov-
ernment had kept most people indoors and
factories, shops and restaurants shut. It proved
key to the anti-virus battle but also resulted in
disruptions in economic activities and supply
chains.
But the impacts are largely “ short-term,
external and controllable,” NBS spokesperson
Mao Shengyong said at a press conference on
March 16.
As the spread of COVID-19 has been basi-
cally contained, China’s improving economic
fundamentals and the trend of upward mo-
mentum in the long term have not changed,
Mao said. He cited the scale of the economy, its
strong resilience, Internet-powered new drivers
and ß exible macro policies as among the major
factors underpinning growth.
“The economy has withstood the shocks of
the epidemic,” he said.
Given that businesses have Tuickened pace
to resume normal operations, the NBS projects
economic activities will see visible recovery in
March and the second Tuarter as the impacts
gradually weaken.
On the outlook for the second half of theyear, the forthcoming stronger
macro policies will put the economy
on a steadier footing, he said.
Facing potential economic
shocks due to the epidemic, the
financial authorities have said they
would pay more attention to policy
flexibility to maintain reasonably
sufĶ cient liTuidity and release the po-
tential of the loan prime rate reform.
Starting from March 16, the
central bank implemented targeted
reserve reTuirement ratio (RRR) cuts
for eligible banks, the second such
cut this year, to release another 550
billion yuan (78.6 billion) of liTuidity
into the market.
Other policy moves include
issuing special reloans to provide
preferential interest rate credit sup-
port to enterprises and floating
special bonds to provide sufficient
funds to commercial lenders to sup-
port smaller enterprises.
On the Ķ scal side, the Ministry of
Finance has allocated Tuotas for new
local government bonds ahead of
schedule and rolled out tax and fee cuts for the
hard-hit sectors.
“Overall, the government debt levels re-
main relatively low...and there is room for raising
the budget deĶ cit,” Mao said.
Asian financial services group Nomura
expects more financial relief and policy
easing measures in the coming months,
including further liTuidity injections through
channels like medium-term lending facility
and RRR cuts.
Data on March 16 also showed that
China’s job market remained generally stable
in February, with the surveyed unemployment
rate in urban areas at 6.2 percent, up 1 percent-
age point from the previous month. It is set to
improve as enterprises restore production. QThis is an edited version of an article published by Xinhua
News Agency
Copyedited by Sudeshna Sarkar
Comments to dengyaTing#bjreview.comStronger Policies on Anvil to Revive Economy
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AThe Cangzhou factory of Beijing-Hyundai Motor Co. Ltd. resumes full production on March 13