Can China's Economy Withstand the Epidemic?

China’s economy is resilient enough to withstand the blow of the novel coronavirus outbreak.

- MA LI

THE World Health Organization (WHO) announced that the novel coronavirus outbreak in Wuhan was a Public Health Emergency of International Concern on January 30 in Geneva, Switzerland. At the same time, WHO Director-General Tedros Adhanom Ghebreyesus lavishly praised China’s epidemic prevention and control measures and stressed that the WHO was not in favor of imposing travel or trade restrictions on China.

After the announcement, the economic impact of the epidemic on China and even the world become the focus of international attention.

Limited Long-Term Impact on China’s Economy

Many experts and observers from international institutions believe that although the impact of the virus is inevitable, the long-term impact on China’s economy will be limited.

Zhang Bin, an expert with the Institute of World Economics and Politics of the Chinese Academy of Social Sciences, believes that the impact will be seen mainly in the first quarter. It is expected that economic movement will cool down in the short term, and that the service sector and industrial investment will be affected. In particular, the consumption of non-durable consumer goods will be significantly affected, such as the box office and tourism. However, consumption of many durable goods will compensate for this drop when the epidemic comes to an end. “This short-term virus outbreak has temporarily increased the fluctuation of the economy, but in the long run, it will not have a great impact on China’s economy,” said Zhang.

Huang Tianlei, a research analyst at the U.S.- based Peterson Institute for International Economics, holds a similar view. He said the outbreak may have a temporary impact on China’s economy, but its impact throughout the year should not be overstated.