Rumor Buster: Will COVID-19 cripple China's economic resilience?-Xinhua

Rumor Buster: Will COVID-19 cripple China's economic resilience?

Source: Xinhua

Editor: huaxia

2020-03-04 15:39:42

BEIJING, March 4 (Xinhua) -- As China works tirelessly around the clock to overcome the novel coronavirus epidemic, some skeptics are still stoking the idea that the virus will end up crippling China's long-term economic resilience.

However, China has proved that it is capable of weathering the storm by carrying out a raft of fiscal, monetary and financial measures, which aim to inject liquidity and boost demand, to offset uncertainty and stabilize the market.

The People's Bank of China has set up a special low-cost refinancing facility of 300 billion yuan (about 42.7 billion U.S. dollars) to provide funds to major national banks and some local corporate banks, and has unveiled incentives to help small and medium-sized enterprises.

The central parity rate of Chinese renminbi, or yuan, against the U.S. dollar strengthened 295 pips to 6.9516 against the U.S. dollar Tuesday, according to the China Foreign Exchange Trade System. The robust performance of the currency is believed to be shoring up overseas investor confidence in the Chinese capital market.

Overseas professionals in various fields have also voiced their insights on China's economy, lending credence to those who remain rational and positive over the country's growth potential in the international community.

China's manufacturing industry, meanwhile, possesses superior infrastructure and technological knowledge, making it attractive to global investors, said Peter Handstein, founder and CEO of global toy giant Hape Group.

"China over the last 20 years has built a very strong infrastructure. I cannot see any country around the world who can match up with that. Especially when you talk about the toy industry. Whatever spare part I need for my products, I find a supplier (in China)," Handstein said.

As global financial markets are tumbling amid the spread of COVID-19, the Chinese market could be one of the best places to diversify risk, said Gene Ma, chief economist for China at the Institute of International Finance.

"There are four things you're looking at -- China's GDP (gross domestic product), inflation number, equity returns, and fixed-income returns. All four indicators are the least correlated with the global market among all major economies," Ma said.

Given the policies taken by China and the gradual resumption of work and production, consumption there could quickly bounce back after the outbreak concludes, Ma said.

(Xinhua reporters Luo Jingjing in New York City, Yang Chenglin, and Gao Pan in Washington also contributed to the story.)