"China's Economy Is Fine" China Takes Steps to Ease Market Concerns

[Asia Economy Beijing=Special Correspondent Park Sun-mi] China, which revealed the economic impact of the novel coronavirus infection (COVID-19) in the economic indicators for January and February, is now stoking the recovery of weakened economic confidence as the virus spread situation calms down.

On the 23rd, the Chinese Communist Party's official newspaper, People's Daily, devoted pages 1 and 2 to focus on reporting that the epidemic situation nationwide is improving and production and daily life order are recovering rapidly. Despite increased downward pressure on the Chinese economy and shocks to economic operations due to various domestic and international factors, it mentioned that China's fundamental livelihood security capacity is strong, and the long-term growth fundamentals and trends of the economy have not changed, indicating that the shock to the Chinese economy is short-term and controllable.

Rather, during the COVID-19 prevention period, the production of emergency medical supplies such as masks and protective clothing increased rapidly, and production in important industries directly related to people's livelihoods was not halted. It optimistically noted that new industries, new products, and services such as internet shopping, online education, telemedicine, and remote work have rapidly increased in demand, seizing new growth opportunities. To show that foreign companies operating in China were not heavily impacted, a separate report included a visit to the Beijing Benz (joint venture) automobile assembly plant located in the Beijing Economic-Technological Development Area, highlighting smooth resumption of operations through a stable supply chain.

Chinese financial authorities also held a joint briefing the day before, focusing on externally demonstrating the resilience of the Chinese economy. Tian Yulu, Deputy Governor of the People's Bank of China, said that a series of COVID-19 response corporate support measures introduced by the government are showing visible effects, stating, "Looking at payment, deposit, and loan data since March, China's real economy is improving due to targeted monetary policy effects in the early crisis period. The People's Bank will continue direct financial support for private, small and medium-sized enterprises and supply chains."

He explained, "For COVID-19 prevention, a re-lending quota of 300 billion yuan (approximately 51 trillion won) was set for companies related to epidemic prevention industries, of which 200 billion yuan was allocated at a low interest rate of 1.27% to about 5,000 companies. Additionally, 130 billion yuan out of the 500 billion yuan special re-lending funds to alleviate financial difficulties of small and micro enterprises and private companies was allocated to small and medium-sized enterprises."

Deputy Governor Tian said that this year's monetary policy goals in China are aligned with ▲controlling inflation, ▲mitigating downward economic pressure and credit crunch risks, and ▲stable economic growth, adding, "Economic indicators show a clear improvement in the second quarter, and inflation will also slow from the second quarter, maintaining a calming atmosphere until the end of the year. The yuan exchange rate can continue to stay around 7 yuan per dollar," expressing optimism.

Li Qiao, Vice Chairman of the China Securities Regulatory Commission (CSRC), who also attended the briefing, mentioned that while the New York stock market fell 15-17% last week, the Chinese stock market only dropped 5%, stating, "The Chinese stock market had lower COVID-19 risks and greater resilience than other global stock markets. Temporary global financial market volatility will not change the upward trend of the Chinese stock market."

This content was produced with the assistance of AI translation services.