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SCIO briefing on China's economic performance in the first quarter of 2020

0 Comment(s)Print E-mail China.org.cn, April 18, 2020
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Financial Times: 

I have two questions. First, will the economic downturn in the first quarter of 2020 have an impact on achieving this year's goal of building a moderately prosperous society in all respects? And will the gross domestic product (GDP) of 2020 double that of 2010? The second question is about the economic growth criteria. Some experts have mentioned the concept of relative economic growth before. Do you think we should abandon the current economic growth target? Thank you.

Mao Shengyong:

Thank you for your questions. The growth rate in the first quarter of this year needs to be viewed objectively. We cannot simply compare this year's economic growth with that of a conventional year due to the outbreak of COVID-19 and the considerable impact it will produce this year. We need to look at the Q1 economic growth with a calm mind.

First, we need to take into account the severe impact of the pandemic. The novel coronavirus disease epidemic is a major public health emergency that has spread the fastest, caused the most extensive infections and been the hardest to contain since the founding of the People's Republic of China in 1949. Facing such a severe epidemic, the CPC Central Committee has been putting people's safety and health as the top priority. A variety of forceful prevention measures have been put in place. The epidemic transmission was contained in a relatively short period, which prevented millions more from being infected and saved the lives of many Chinese people. Nevertheless, the price of achieving this was short-term economic loss.

Second, we need to consider the backdrop wherein the global economy and trade have declined sharply. As the pandemic has spread to more than 200 countries and regions worldwide, global cross-border investment, trade in goods and personnel exchange has fallen sharply. Some countries and institutes have lowered their growth forecast. China can hardly stand aloof against such a backdrop.

Third, we need to look at the advantages of China's entire industrial system. China's strong industrial production capacity, as well as its supporting facilities that are in an advantageous place, played a unique role in epidemic prevention and control. Meanwhile, such capacity has been further consolidated and enhanced over the course of the epidemic rather than being damaged by it. Despite a slowdown in growth, the industrial system as a whole was not impacted and neither was the entire production capacity. China has a sound social production system and ample production capacity. When the economy recovers, the capacity will release gradually.

Fourth, we need to see that the long-term upward trend of China's economy has not changed. The epidemic is a public emergency. The basic conditions and factors supporting China's long-term economic growth have not changed. The Chinese market is large and growing rapidly with great potential. Such fundamental characteristics will not change. In light of supporting factors, China has a sound industrial foundation with a strong supporting capacity and an ample labor force of constantly accumulating human capital as well as efficient logistics and transportation facilities, which will effectively support its medium- and long-term economic growth. Meanwhile, China will continue to deepen reforms and opening up and promote innovation to unleash the driving force, the potential and vitality of the economy. Therefore, the fundamentals of China's economy that is on a long-term upward trend will not change over the course of the short-term impact incurred from the epidemic. China's GDP in Q1 dropped 6.8 percent year on year. We need to consider this information with a calm mind, taking into account fundamental factors, including the impact of the epidemic, changes to the external environment and the advantages of China's own industrial system that is on a long-term upward trend. 

With regard to the goal of building a moderately prosperous society in all respects, one of the two centenary goals set out at the 18th CPC National Congress, China has basically achieved the goal on the whole after years of sustained economic and social development. Of course, there are still some shortcomings, the biggest of which is poverty alleviation. So, the focus of the entire Party and the whole country is to set itself on a course that will lead to winning the battle against poverty. As we make progress and win battles, the goal of building a moderately prosperous society in all respects will be better achieved. Such a society will be of better quality, more amenable to the test of history and more satisfying to the people.

Speaking globally, the Chinese economy fared slightly better in the IMF's forecasts. But the world has been affected and impacted by the COVID-19 pandemic on the whole. This shows that the world is indeed a global village and a community with a shared future for humanity, and the virus is the common enemy of all humanity. In this instance, the world needs to step up international cooperation to contain the epidemic as soon as possible by improving development and research in order to find solutions. In this way, we can get the world economy back on track at an early date. Thank you.

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