Business
Expert suggests more policy support as China's GDP contracts in Q1
By Zhang Shasha  ·  2020-04-17  ·   Source: Web Exclusive

Foreign trade containers are being moved at the container terminal in Lianyungang Port, Jiangsu Province in east China, on April 14 (XINHUA)

China's gross domestic product (GDP) stood at 20.65 trillion yuan ($2.91 trillion) in the first quarter of 2020, shrinking 6.8 percent year on year under the impact of the novel coronavirus disease, according to statistics from the National Bureau of Statistics (NBS) on April 17. 

China's overall social and economic development remained stable despite the impact of the epidemic, Mao Shengyong, spokesperson of the NBS, said.

But it is also worth noting that internationally the epidemic continues to spread and the downward pressure facing the world economy is increasing, amid uncertainties and new challenges in the work resumption and the social and economic development, he said.

"The data is as expected since the impact of the epidemic is unprecedented," Xu Hongcai, Deputy Director of the Economic Policy Commission, China Association of Policy Science, told Beijing Review. "But the economic recovery has gathered significant momentum since the middle of March, which is worth noting."

March witnessed a much smaller decline in indicators such as the industrial added value of enterprises above a designated size, compared with the previous two months, he said.

Xu said China still faces great challenges as the external situation remains uncertain. He noted that the foreign trade may come under greater strain after the second quarter as overseas orders may see a significant drop starting April. That will have a great impact on employment. The Q1 foreign trade data mainly reflected the situation of the fourth quarter in 2019.

In the future, Xu suggested that China should adopt a more proactive fiscal policy and ease its monetary policy.

Xu said it is feasible to appropriately enlarge the issuance of the local government special bonds. Instead of consumer vouchers, cash handouts to low-income residents in the urban and rural areas are more effective in boosting consumption, he said.

He also encouraged further lowering of the corporate income tax for small- and medium-sized enterprises.

Copyedited by Madhusudan Chaubey

Comments to zhangshsh@bjreview.com  

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