19 MAR 2020
An editorial appearing in China Daily states that after the Coronavirus epidemic is curbed, the consumption that has been constrained will be rapidly released, and there will be explosive growth in imports and exports.
Liu Ying, a researcher at Chongyang Institute for Financial Studies, Renmin University of China, notes that China is the largest trade partner of more than 100 countries and its manufacturing industry accounts for 25 percent globally. In the short term, the epidemic’s impact on China’s exports will be larger than that on imports, says Liu, who predicts that the global supply chain will rapidly recover in the second quarter as the epidemic is effectively brought under control.
“Hubei province has been suffering the most because of the virus, but it only accounts for 1.5 percent of the country’s total exports, which means the outbreak’s impact on China’s exports in 2020 is expected to be limited.
“Although the epidemic has had a negative impact on China’s imports, in the full year it will drive imports up, because China has just signed the phase one trade deal with the United States to import agricultural products and foods worth $100 billion, and there will be increased imports of medical supplies and medicines because of the epidemic.”
Since the SARS outbreak in 2002-03, China’s foreign trade dependence has reduced from 51.3 percent to 31.8 percent, meaning that exports are no longer the major driving force of economic growth, says Liu. The epidemic will mostly impact the tourism industry.
A Reuters poll of 40 economists based in China, Hong Kong, Singapore, Europe and the U.S. predicted China’s annual economic growth in the first quarter of 2020 to drop to 4.5 percent, down from 6.0 percent in the previous quarter. The drop was expected to cut the 2020 full-year growth rate to 5.5 percent, down from 6.1 percent in 2019. However, the economists believe the economy could bounce back in the second quarter.
Hubei reported 1,693 new cases of coronavirus on Tuesday, down from 1,807 the previous day. Deaths rose by 132, up from 93 the previous day. The latest figures bring the total number of coronavirus cases globally to over 75,000 with over 2,000 deaths and 14,000 recoveries.