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Sunday, February 2, 2020

China Prepares for Economic Affects of the Virus Outbreak

China needs to prepare for consequences of virus

Source:Global Times Published: 2020/1/30 22:43:40

A Miaoxi village official from Northwest China's Shaanxi Province sprays disinfectants on the road and buildings. Photo: Li Lei/GT

As China is concentrating all efforts in fighting against the outbreak of the novel coronavirus (2019-nCoV), the central government should also be alert to and make preparations for the inevitable economic decline.

Given the devastating impact of the epidemic outbreak on consumption, which is the primary engine of economic growth, the Chinese economy is expected to face growing downward pressure in the short term. Zhang Ming, an economist with the Chinese Academy of Social Sciences, said in a recent report that China's GDP growth may drop to 5 percent or even lower due to virus onslaught.

As a result, observers generally believe the government will maintain a loose monetary policy and roll out proactive fiscal policies to boost confidence at least in the first quarter. But that may be not enough, and a more comprehensive approach is needed when it comes to being ready for the economic slide.

For instance, while financial authorities have decided to delay market opening on the Shanghai and Shenzhen stock exchanges to avoid a likelihood caused by panic selling, more measures to stabilize the financial markets are urgently needed.
 
 
 
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