by Xinhua writer Guo Yage
BEIJING, May 21 (Xinhua) -- As China, like other countries, has taken a hit by the shock of the coronavirus pandemic, pessimists in the West rushed to draw a dark picture for the Chinese economy.
U.S. TV network NBC News said last week that the Chinese economic contractions in the first quarter threaten "China's status as an economic heavyweight," while Iris Pang, chief economist of Greater China for the global financial institution ING, anticipated in a March report that "the nightmare" for China's economy is to continue.
However, those pessimists have failed to grasp that such hits are temporary and manageable, and that the world's second largest economy is resilient enough to ride out this crisis in the long run.
The very first reason is that the fundamentals of China's long-term economic growth remain sound and steady despite the ravaging pandemic.
With an orderly resumption of production, economic recovery in China is already underway. In April, the country's value-added industrial output, an important economic indicator, returned to growth as factory activities gradually normalized, pointing to an across-the-board improvement in the macro-economy.
In addition, the index measuring service sectors and retail sales of consumer goods fell 4.5 and 7.5 percent last month respectively, narrowing from 9.1 and 15.8 percent in March, according to data from China's National Bureau of Statistics.
Secondly, China has been good at locating opportunities and fostering new sources of growth in times of crisis, such as in the 1997 Asian financial crisis and the 2008 global financial meltdown.
In the first two months of this year, when China was in the thick of its battle against the deadly virus, internet services and related sectors in the country recorded total revenues of 18.4 billion U.S. dollars, up 4.5 percent year-on-year, out of strong demands for online working, teleconferencing and education services.
Digital economy and e-commerce have also embraced a new surge. Livestreaming sales, which allow consumers to buy all kinds of goods from houses to clothing during live internet streams, are becoming increasingly popular.
The third is China's irreplaceable role in global supply chains and the country's unique comparative economic and manufacturing advantages.
It is natural for the international community to reflect on the deficiencies of the current global supply chains exposed in this global health crisis, and consider ways to make this globalized economy more risk-proof. Yet, selling a decoupling theory, which seeks reshoring outsourced jobs and a clean breakaway from China, by a bunch of zero-summers in Washington is both irresponsible and impossible.
One major reason why China is going to remain an important part of global supply chains is that it has been the world's only country with all industrial categories of the UN industry classification, while its manufacturing accounts for nearly 30 percent of the world's total.
China also has the world's most populous consumer market, with over 400 million middle-incomers, and has pledged to further open up and continue leveling its domestic playing field for both Chinese and foreign businesses.
A flash poll in March by the Beijing-based American Chamber of Commerce showed U.S. businesses remain bullish on Chinese consumers, despite the impact of the virus. And China has witnessed foreign direct investment into its mainland rebounding in April, up 11.8 percent year-on-year.
The fourth is China's ample policy elbow room to cushion the impact of the crisis.
To keep businesses afloat, the Chinese government has provided additional liquidity to the market and granted targeted support to small and medium-sized enterprises and companies operating in critical supply chains, said World Bank Country Director for China Martin Raiser, adding that it certainly has much room for expanding and modernizing the social protection system, as well as increasing targeted investment in non-traditional infrastructures.
At Friday's meeting focusing on a draft government work report, the Political Bureau of the Communist Party of China Central Committee has decided that the country's proactive fiscal policy should be more positive, its prudent monetary policy should be more flexible and appropriate, and its employment priority policy should be further strengthened.
In mid-April, the International Monetary Fund predicted China's economy would grow by 1.2 percent this year despite a contraction in the first quarter. And for 2021, the agency projected a strong rebound to 9.2 percent, leading all major economies. Those projections have signaled the world's confidence in a resilient Chinese economy in the post-pandemic world.
Just as the president of Washington-based think tank Peterson Institute for International Economics Adam Posen told Xinhua, "China's objective economic status will rise" in the post-coronavirus era.
In today's world of hyper interconnectedness, a rising tide either raises or sinks all boats. As a dynamic Chinese economy is in every way good news for the world economy, members of the global community should jointly make sure that they will be the rising boats amid the turbulent waves.