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Yu Miaojie: Heightened Dependence on Chinese Goods

Jul 05-2020   



That Beijing unexpectedly becomes the flashpoint in the battle against the pandemic will hardly affect China’s resumption of economic activities as well as its economic growth, writes Prof. Yu Miaojie in a commentary for Netease Finance. Besides teaching international trade and economics, he’s also the CCP Chief and Deputy Dean of the NSD. He remains confident that the Chinese economy is on way to 3-3.5% annual growth.

 

In terms of economic output, Beijing is of middling size among Chinese provinces, therefore the impact of the outbreak is more political and cultural. Besides, the outbreak is most likely to get under effective control in a month or even two weeks, thanks to experiences garnered in Wuhan and the rest of the country, argues Prof. Yu.

 

What’s worrisome is the severity of second-round outbreaks abroad. In South America and the US, no substantial upturn has been achieved. The IMF has once again slashed the growth estimate for the world economy, and many countries might only be able to partially resume work and production in the third quarter. Consequently, it can be inferred that some countries will import more Chinese goods, possibly leading to an increase in China’s export figures in the third quarter.

 

China should make its international policy – trade policy included – more open. Export firms will encounter various challenges, and should try to diversify their target markets. Initiatives such as Hainan Free Trade Port will be a beachhead for China’s new round of comprehensive opening up.

 

Fiscally, China enjoys certain room for expansion in the short term as the fiscal deficit has been adjusted upward to 3.6%. The government can pursue a proactive fiscal policy and make more investments to pull the economy, given that companies are investment-averse at the moment.

 

The recipe of proactive fiscal policy, prudent monetary policy, and open-arm trade policy has the hope of driving the Chinese economy to maintain moderate growth in the pandemic, concludes Prof. Yu.

 

Yu Miaojie: Heightened Dependence on Chinese Goods

Jul 05-2020   



That Beijing unexpectedly becomes the flashpoint in the battle against the pandemic will hardly affect China’s resumption of economic activities as well as its economic growth, writes Prof. Yu Miaojie in a commentary for Netease Finance. Besides teaching international trade and economics, he’s also the CCP Chief and Deputy Dean of the NSD. He remains confident that the Chinese economy is on way to 3-3.5% annual growth.

 

In terms of economic output, Beijing is of middling size among Chinese provinces, therefore the impact of the outbreak is more political and cultural. Besides, the outbreak is most likely to get under effective control in a month or even two weeks, thanks to experiences garnered in Wuhan and the rest of the country, argues Prof. Yu.

 

What’s worrisome is the severity of second-round outbreaks abroad. In South America and the US, no substantial upturn has been achieved. The IMF has once again slashed the growth estimate for the world economy, and many countries might only be able to partially resume work and production in the third quarter. Consequently, it can be inferred that some countries will import more Chinese goods, possibly leading to an increase in China’s export figures in the third quarter.

 

China should make its international policy – trade policy included – more open. Export firms will encounter various challenges, and should try to diversify their target markets. Initiatives such as Hainan Free Trade Port will be a beachhead for China’s new round of comprehensive opening up.

 

Fiscally, China enjoys certain room for expansion in the short term as the fiscal deficit has been adjusted upward to 3.6%. The government can pursue a proactive fiscal policy and make more investments to pull the economy, given that companies are investment-averse at the moment.

 

The recipe of proactive fiscal policy, prudent monetary policy, and open-arm trade policy has the hope of driving the Chinese economy to maintain moderate growth in the pandemic, concludes Prof. Yu.