Economist: China to have 'robust rebound' in trade after outbreak containment

The impact of the novel coronavirus outbreak on China's economy will be temporary and will not alter the fundamentals of its foreign trade, foreign investment, or core position in the global industrial chain from a long-term perspective, Wei Jianguo, vice chairman of the China Center for International Economic Exchanges, said at a press briefing held by the State Council Information Office in Beijing on Friday.

Wei Jianguo, vice chairman of the China Center for International Economic Exchanges and former vice minister of commerce, speak at a press briefing held in Beijing on Feb. 28, 2020. [Photo by Jiao Fei/China SCIO]

Wei Jianguo, who is also China's former vice minister, said China will see a "robust rebound" in foreign trade once the virus is contained. He predicted that China's foreign trade this year will be two to three percentage points higher than last year. Foreign trade in 2019 recorded a 3.4% growth. 

"The outbreak is a major test facing China's foreign trade, but I'm confident that China will rise to the challenges with a good economic performance."

Wei said that certain consumer demand (that has been held back by the epidemic) is not disappearing. Spending on imported products, especially those related to healthcare and personal hygiene, will surge after the outbreak, and related industries will usher in a period of faster growth. He said China's imports will record a two-digit growth this year.

"China's foreign trade has strong resilience and competitiveness, especially its innovative ability to explore foreign markets," Wei said. "Therefore, the long-term positive trend of the foreign trade will not change." The former vice commerce minister added that, in recent years, China has promoted the transformation and upgrading of processing trade, and private enterprises have played an increasingly important role in foreign trade.

Over the past weeks, China has made considerable progress in resuming economic activities, as the resumption of work and production is accelerating in an orderly manner to battle the novel coronavirus outbreak. However, Wei pointed out that more efforts are needed in restoring the major industrial chains to ensure a strong rebound.

Wei said China's major foreign trade regions of Guangdong, Zhejiang, and Shanghai are all stepping up their pace of work resumption, but some companies there may feel that it is difficult to restore their production capabilities to normal levels.

"The key issue is the lack of raw materials, as many upstream industries have yet to restore production," Wei said. "More efforts are needed to ensure the resumption of production in upstream industries, such as chemical fiber goods required to produce masks."

In addition, Wei said that a series of policies and measures carried out this year, such as the Foreign Investment Law and the revised negative lists for foreign investment market access, will further optimize the business environment and widen market access for foreign companies, and therefore bolster foreign investors' confidence.

During the G20 meeting in February, the International Monetary Fund downgraded its 2020 growth forecast of China to 5.6% from its initial estimate of 6% made in January. 

Zhang Yansheng, chief researcher at the China Center for International Economic Exchanges, speaks at a press briefing held in Beijing on Feb. 28, 2020. [Photo by Jiao Fei/China SCIO]

Zhang Yansheng, chief researcher at the China Center for International Economic Exchanges, also spoke at the press briefing. He said that, although the outbreak may put a damper on economic growth, China's economy has shown resilience and potential throughout its history, and many of the country's major economic transformations happened during slowdowns.

"This is an opportunity to cultivate and expand new economic growth points," said Zhang. "It is critical to lay a good foundation for China's future sustainable economic and social development."