SCIO briefing on China's economy in January and February

The State Council Information Office (SCIO) held a press conference in Beijing on Monday to provide information on China's economic performance in January and February. March 19, 2020

Market News International: 

The epidemic spiked in February. The economy in January should have been mostly normal. Can you estimate the total impact on February? Will production and consumption fully recover by April? With the "two sessions" postponed, will this influence the formulation and implementation of economic development targets for this year, especially the second half of the year? Thank you. 

Mao Shengyong: 

Thank you for your questions. To offset the influence of the Spring Festival holiday, the major indicators of January and February are always calculated together because the Chinese New Year can fall in either January or February, which brings some volatility. This year was not the first time the statistics were combined. It has always been this way. The economy was pretty good before January 23. It was operating normally. Then it was influenced by epidemic prevention and control. So, the economy was mostly impacted in February. Since mid-February, however, the central government has been coordinating epidemic prevention and control with economic and social development. And the disruption has been abated. Enterprises are resuming production gradually and life is creeping back to normal. This is how things developed across January and February. 

Generally, the disruption in February was bigger than in the previous month. I think that life and production have accelerated towards full recovery. Different departments have different angles and samples of statistics in terms of the resumption of operations of enterprises above designated size. The National Bureau of Statistics conducted three quick surveys from February 12 to 29. By February 29, the ratio of enterprises above designated size, including major industrial and construction enterprises, that resumed production increased by 19.8 percentage points compared to the previous week. Recently, statistics released by relevant departments showed that 95% of enterprises above designated size in regions outside Hubei Province have resumed production. We believe that great progress has been made in terms of resumption of work.

Nevertheless, the epidemic is still spreading elsewhere in the world, which will probably cause uncertainty for us. For this reason, we should continue epidemic prevention and control in earnest. Meanwhile, we should promote resumption of production and a return to normal life. We will strengthen international cooperation on epidemic prevention and control and play a key role as a responsible major country in helping other countries combat the epidemic. After March, especially in the second quarter, production and daily life will largely return to normal. 

As for the targets set at the "two sessions," that is normally where major targets for the economic and social development for the year are determined. Those targets reflect the performance of every sector in economic development. But they should be formulated according to the actual situation. Facing the disruptions caused by the outbreak, strong hedging policies will be introduced to diminish the impact of the epidemic and keep things on track to meet the targets set for the year, especially poverty alleviation. Thank you. 

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