China’s Xi Jinping speaks about coronavirus threat on economy

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Chinese President Xi Jinping, inspects the novel coronavirus prevention and control work in Beijing on Feb. 10, 2020.

Xinhua News Agency

The Chinese leadership is rallying its people to get back to work even as the country continues to battle with the coronavirus outbreak, amid city-wide lockdowns and quarantines in the worst-hit regions.

“This is both a crisis and a big test for us,” President Xi Jinping said at a Sunday meeting in Beijing, state news agency Xinhua reported.

He said efforts were being made to cure people, reduce fatality rates, safeguard social stability, and strengthen China’s emergency medical supplies and daily necessities, according to Xinhua’s translations of his remarks.

Since end-January, the world’s second largest economy has shut down factories, businesses and schools in efforts to limit the spread of the disease, which has killed nearly 2,600 and infected more than 77,000 in the mainland so far.

The prolonged Lunar New Year holiday has had knock-on effects on the global supply chain and dented overall market sentiment. It has also spurred global companies to further diversify their supply chains away from China.

The epidemic’s impact on China’s economic and social development is temporary and generally manageable, but it will deal a relatively big blow in the short term, Xi said, according to Xinhua.

Even as the world’s second largest economy pulls out all stops to contain the outbreak, it is keen to revive its vast industry and economic machinery that has been running at breakneck pace for the last four decades, and contributed to social stability in the Communist nation.

Getting workers back to production

In the speech, Xi made calls for the businesses to get back to work and stressed on orderly resumption, with each region adopting a “precise approach” based on local health risks, according to the Xinhua translation.

Stakes are high as the virus, recently named COVID-19, is set to batter China’s first quarter economic growth and challenge the country’s goal of eradicating poverty by 2020. It could also impact employment of fresh college graduates and hinder critical sowing activities for agriculture in spring.

Officials at the China’s National Development and Reform Commission said on Monday that the impact of new disease on the economy is rather great and its hit on employment “not small,” according to a CNBC translation.

The difficulty for college graduates and agriculture workers will be greater, said You Jun, the assistant minister for human resources and social security.

China says that some large enterprises are already getting up to speed.

According to the National Development and Reform Commission on Monday, the rate of resumption of work for the iron and steel industry was at 67.4%, while that for nonferrous metals was at 86.3%. Food processing was back up at more than 70%, while coal mine production was back up at 76%, NDRC said.

China will also roll out proactive fiscal and monetary policies, and targeted measures to help enterprises, said Xi on Sunday in what is seen as a sign of more aggressive measures to stimulate the economy.

The People’s Bank of China said last Friday that it could adjust the benchmark deposit rate, among other measures to support the economy.

— CNBC’s Evelyn Cheng contributed to this report.

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