A recovery in China’s trade growth would not be sustainable unless the COVID-19 pandemic is brought under control globally, Chinese Minister of Industry and Information Technology Miao Wei (苗圩) warned yesterday.
China’s exports last month saw a surprise increase, partly because of rising medical product shipments, as production resumed after months of closures to control the outbreak, while imports and exports fell less than expected in renminbi terms in the first four months of this year.
However, Miao told a news conference that “although our imports and exports in renminbi terms from January to April have increased moderately, I think that if the global pandemic cannot come under effective control, this is unsustainable.”
To drive economic growth, the country would “rapidly activate domestic demand” to make up for weakness in the international markets, he said.
China had already been trying to boost consumption as a key driver of domestic growth in a drive to recalibrate the economy from one driven by exports and state investment.
Companies have experienced a fall in production since work resumed because of falling demand after governments went into lockdown to contain the spread of the disease, effectively strangling their economies, Miao said.
China’s key markets have been reeling from the fallout, with more than 30 million jobs destroyed in the US, where US Secretary of the Treasury Steven Mnuchin has warned of “permanent damage” to the economy if strict stay-at-home measures are not lifted soon enough.
Asked about the possibility of firms having to stop work again, Miao said that the “general policy direction is still to ... use domestic demand and consumption to drive economic growth.”
He said he believes that there remains scope for the industrial economy to continue recovering in the second quarter, adding that if the pandemic comes under control, performance would be better in the second half of the year.
A survey by Chinese authorities showed that about 40 percent of foreign-funded enterprises plan to step up investment in China in the near term, Miao said.
However, firms engaged in foreign trade have been hit particularly hard during the pandemic.
China plans to “introduce more targeted policies” to help smaller firms, he said.
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