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Ambassador WU Xi's Presentation at the Roundtable on China's Economic Resilience and the Impact of COVID-19
2020/02/27

Vice Chancellor Grant Guilford,

Executive Director Jason Young,

Ladies and Gentlemen,

The sudden outbreak of the COVID-19 epidemic has put China at the battlefront of fighting the epidemic. Since the outbreak, the Chinese government has taken comprehensive and rigorous measures to prevent and control the epidemic. This may be a war without smoke, but it comes with casualties and great sacrifice all the same. After more than a month of coordinated efforts, the preliminary spread of the COVID-19 epidemic has been contained.

The overall trend of new confirmed and suspected cases across the country is declining, and the number of cured patients is rapidly increasing, especially with new cases outside the epicenter in Hubei Province. As we move toward the resumption of normal economic and social activities, all eyes will be on the economic impact of the epidemic in China and around the world.

I would like to thank the New Zealand Contemporary China Research Center of Victoria University of Wellington for joining the Embassy to organise this Roundtable on China’s Economic Resilience and the Impact of COVID-19. Through our discussion, I hope we will be able to pool ideas to mitigate the short term impact and to strengthen confidence in the resilience of the Chinese Economy.

First, I’d like to make a brief update of China’s comprehensive efforts to prevent and control the epidemic, and the progress we have made so far:

The Chinese government puts people’s life and health first. Since the outbreak of the COVID-19 epidemic, we have taken a whole-of-government approach, leveraging whole-of-nation resources, and mobilising whole-of-society forces to fight a people’s war against the epidemic.

Under the leadership of President Xi Jinping, the whole nation has been rapidly engaged. The government took the decisive step of quarantining the city of Wuhan and providing all round support to the people of Wuhan. Strong prevention and control measures have been enforced nationwide to minimise further infections.

At the same time, we have shared information with the World Health Organisation and other relevant parties in an open, transparent and responsible manner. WHO Director General Dr. Ghebreyesus has noted his deep appreciation of China's extraordinary measures to fight the epidemic. He considers that China has set a new standard for epidemic response for the world. The WHO has repeatedly underlined that it does not recommend any limits on travel and trade with China.

Through our hard work, the epidemic is generally under control. According to the National Health Commission by midnight Feb 24, 508 new confirmed cases of novel coronavirus infection and 71 deaths, bringing overall confirmed cases and total deaths on the mainland to 77,658 and 2,663, respectively. Regions outside Hubei report 9 new infections, a single-digit increase for the first time in weeks. 2,589 people were discharged from hospital after recovery. A total of 27,323 patients infected with the novel coronavirus had been discharged from hospital after recovery. China's daily numbers of newly cured and discharged novel coronavirus patients have surpassed that of new infections for the seventh consecutive day. However, the nationwide inflection point of the epidemic has not yet arrived, and the situation remains serious and challenging in Hubei and its capital city Wuhan. President Xi Jinping delivered an important speech at the meeting to advance the work on coordinating the prevention and control of the COVID-19 and economic and social development, in Beijing, Feb. 23, 2020. President Xi stressed unremitting efforts in COVID-19 control, coordination on economic, social development and made relevant deployment.

Socialism with Chinese characteristics is our fundamental guarantee of winning the war against the epidemic. It has notable strengths. The leadership of the CPC is unified, and people are the masters of the country. With law-based governance, we are concentrating resources to focus on major tasks. With a strong and determined leader, a highly efficient system and fully united population, we have every confidence we will soon overcome the difficulties and move forward together once again.

Now, I would like to share my observation on the economic impact of the epidemic:

The epidemic has undoubtedly affected China’s macroeconomic environment, and some service industries have been significantly impacted over the Chinese New Year holiday. The impact of the epidemic on economic activity will continue for a while, as it compounds difficulties in production and management for industrial enterprises, especially small and medium-sized ones.

However, the impact of the epidemic on China's economy is temporary and will be limited. It will be mainly reflected in the first quarter of the year, which typically accounts for a small proportion of the annual growth. After the epidemic is over, the economy will return close to its potential output. The epidemic will not change the fundamentals or long-term positive trends in China's economic growth.

In the mid-to-long term, economic and financial data shows the positive factors driving China's economic development are still increasing, and China’s inherent resilience and potential are also increasing. These long-term positive factors and the fundamentals of high-quality growth will not be reversed by a temporary epidemic.

Third, I’d highlight the resilience and potential of China’s economy, despite the notable impact of the epidemic.

China’s long-term trend of steady growth and momentum will not change. Let me take you through some facts and figures:

First, the scale of China’s economy is big enough and dynamic enough to fend off short term risks:

● China’s GDP of 14 trillion USD is 9 times that of 2003, when its economy was hit by SARS.

● China now has 100 million people classified as middle-income earners, and innovators and entrepreneurs - making it one of just a handful of countries with these population groups.

China has a great deal of leeway to manage investment, consumption, exports, infrastructure, and people's wellbeing:

● New types of industrialisation are underway

● Urbanisation and digitisation are accelerating, and the economy is becoming more information based

● The purchasing power of everyday people has continued to grow

China's economy is a whole-industry economy:

● China has the world's most complete industrial chains and the most efficient supply chains.

● City clusters and industrial clusters are well distributed along China’s coastal areas and inland areas.

China has a diversified economy:

● We have strong state-owned enterprises, strong mixed-ownership enterprises and a thriving private economy.

● We have successful traditional industries, and first-class emerging industries

● Our agricultural and food production sectors are strong

● The strengths of China’s service industry remain virtually intact and will rebound after the epidemic.

China's economy has strong institutional strength:

● The market plays a decisive role in the allocation of China’s resources.

● The government has strong capabilities in macro-coordination and control, resource allocation and emergency response capabilities, as well as sufficient economic, financial, and administrative resources.

China's economy is in the process of reform and opening up, which is not disrupted by the epidemic:

● We are promoting supply-side structural reforms, building free trade zones, further opening the domestic market to foreign capital, and fostering a market environment underscored by fair competition.

● These efforts will continue to accelerate after the epidemic is over.

China's economy has a long and proven track record of resilience:

● It has withstood previous challenges and events such as the Asian Financial Crisis, and Global Financial Crisis.

● China’s economy successfully rebounded following SARS in 2003, H1N1 (swine flu) in 2009, and H7N9 (bird flu) in 2013, as well as the Wenchuan earthquake in 2008.

Fourth, let’s look at the measures to promote the stability and growth of China’s economy

President Xi Jinping has emphasized that China will win the people's war, general war, and siege war of epidemic prevention and control, and strive to fulfill this year's economic and social development goals and tasks.

These include completing the task of poverty relief on schedule, preventing and controlling pollution, and securing the economy against systemic financial risks. We are taking measures to counter the impact of the epidemic in 5 areas:

1. We are committed to establishing an economic and social order compatible with epidemic control, while resuming work and production in an orderly manner. This includes:

● stabilising employment and prices, to ensure basic living standards among poorer urban residents.

● pushing for the resumption of work and production with precise epidemic prevention and control strategies with different regions taking precise, region-specific approach to promote resumption of work.

● smooth travels and logistics channels and lifting cargo transport bans to push all links in the industrial chains to resume work and production in a coordinated way.

● supporting and compensating the families of medical workers and other personnel who died fighting the epidemic.

2. We have a prudent and flexible monetary policy that will encourage more positive and proactive fiscal policy, and precise financial services will be provided for the resumption of business and the growth of the real economy.

● The People's Bank of China has released 1.7 trillion yuan in liquidity while over 30 financial measures have been applied.

● 99.5 billion yuan has been arranged by the fiscal departments at various level earmarked for epidemic fighting.

● More than ten fiscal and tax support measures have been announced.

3. Effective relief policies will be implemented to support small and medium-sized businesses and enterprises in vital industries, especially those that have been significantly affected by the epidemic, such as accommodation, catering, sports, entertainment, transportation and tourism.

● We have rolled out of more targeted interim policies in cutting taxes and fees to help micro, small and medium-sized firms tide over difficulties.

● We are ensuring the stable production and supply of farm produce, preparing for spring farming, and the prevention and mitigation of disasters.

4. We will expand effective demand, unleash consumption potential, encourage effective investment and step up the construction of new investment projects. This includes:

● initiating more new investment projects, and actively promoting projects under construction.

● adjusting and optimising the investment structure, prioritising emergency medical treatment facilities and isolation facilities in epidemic-stricken areas.

● overcoming the last remaining challenges of poverty alleviation, promoting rural rejuvenation, and supporting rural settlements and public health systems in combination with epidemic prevention.

● strengthening guarantees of land, capital and energy consumption, and ensuring that major projects, especially manufacturing projects, are started in time.

● supporting research and development for medicines, drugs and vaccines, biomedicines and medical equipment, and developing 5G networks and industrial internet.

5. We will deepen the process of opening up and international cooperation, enhance communication and coordination with our economic and trade partners, and give priority to helping enterprises that have a significant influence in the global supply chain to resume production and supply.

● Foreign trade policy tools like export tax rebates and export credit insurances should be put to good and full play to ensure smooth operation of foreign trade industrial chains and supply chains.

● Major foreign investment projects should be well implemented

● Opening-up of finance and other services should be expanded.

● Business environment should continue to be optimized to strengthen foreign businesses' confidence in long-term investment and operation in China.

In conclusion, the fundamentals of China's long-term economic development remains unchanged, the impact of COVID-19 on the economy will be short-lived and generally manageable, and the long-term positive trends of the economy will sustain.

China has the confidence and the capacity to fully unleash the huge potential and powerful driving force of China's development and strive to achieve the goals and tasks for economic and social development this year. Going through the ordeal of the epidemic, China’s economy will become more resilient, stable and dynamic and continue to contribute to the world economy.

China's efforts to fight the epidemic and boost economy have effectively reduced the risks the world economy may be exposed to. Today China's GDP accounts for around 16 percent of the global total and contributes over 30 percent to world economic growth. Therefore, by fighting against the COVID, China is safeguarding both its own country and the world. It is with such a sense of responsibility that President Xi Jinping has recently stressed unremitting efforts in the prevention and control of COVID-19 epidemic and advancing economic and social development in a coordinated way.

The non-traditional securities issues, like the epidemic, know no borders. No country can be isolated from these security risks. These non-traditional security issues require a global response. We can only win the war against the epidemic with confidence, solidarity and synergy. That is one of the reasons why President Xi put forward the initiative of building community with shared future for mankind. Only by doing so can we move together to a bright future.

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