Officials from the National Development and Reform Commission talk to reporters over live videos. Photo: NDRC

China’s National Development and Reform Commission (NDRC) said Tuesday it will launch new measures to support different sectors at the right time to offset the negative impact of Covid-19 on the economy. 

Major economies such as the United States and Europe have recently made substantial adjustments to their macro policies, Li Hui, deputy director of the Comprehensive Department of NDRC, told a press conference on Tuesday.

China still has a lot of policy tools that can be used and will keep monitoring the situation of its economic trend and launch new supportive measures if necessary, Li said. 

These measures will be aimed at minimizing the negative impact of Covid-19 on the economy and try to complete the nation’s target of forming a moderately prosperous society. 

In the first two months of this year, the NDRC examined and approved 19 fixed-asset investment projects that will cost 185.3 billion yuan (US$26.5 billion), mainly in transportation, high-tech and other industries.

Among them, the construction of a third runway at Shenzhen Airport to meet air travel demands in the Pearl River Delta region and help to build an international aviation hub in the Guangdong-Hong Kong-Macau Greater Bay Area. 

Resumption of production

As of Tuesday, more than 90% of industrial companies in many Chinese provinces, excluding Hubei, had resumed operations, said NDRC spokesman Meng Wei. In some provinces and cities such as Zhejiang, Jiangsu, Shanghai, Shandong, Guangxi and Chongqing, all companies had resumed their operations.   

Since mid-February, the pace of the resumption of companies’ operations had been accelerating, said Mao Shengyong, spokesperson of the National Bureau of Statistics. 

Due to China’s huge economic scale, a sufficient supply of necessities and the development of the internet economy, the Chinese economy in March had significantly improved from January and February, he said. With its strong and promising macro policy, China was confident about achieving its economic growth target for this year, he said. 

Monetary policy

Zhang Xu, chief analyst at Everbright Securities, said the prices of assets such as US treasury notes and stocks fell sharply due to the outbreak of Covid-19, while some markets were facing an extreme lack of liquidity.

Zhang said, fortunately, these problems did not happen in China. He said Chinese bond yields have fallen sharply since the beginning of the year, while the Chinese stock market was more stable than that of the United States. As a result, it was not urgent for China’s central bank to lower interest rates for the medium-term lending facility (MLF). 

At the current stage, inflationary pressure has remained a constraint for China to loosen its monetary policy, Zhang said. Since the fourth quarter of last year, China’s consumer price index has risen rapidly compared with the same period last year, while one-year MLF interest rates have fallen, he said. Low-interest rates may create financial risks, he said. 

Sales of passenger cars

Total sales of passenger cars in China may decline by 2.7 million units in wholesale and decrease by 2 million units in retail sales this year due to the Covid-19 epidemic, according to the estimation made by the China Passenger Car Association.

If the epidemic is well controlled in April, the automobile market will improve in the second half of this year. If not, both wholesale and retail sales of passenger cars may face a double-digit decline.

Last year, 20.7 million passenger cars were sold in China, down 7.4% from 2018. The China Passenger Car Association previously estimated that total sales would reach 21 million units this year. 

Company news

ZTE, a large Shenzhen-based communication company, said on Monday it had not received any notice from relevant departments of the US government about the investigation launched by the US Department of Justice against it for alleged commercial bribery. 

The company said it will actively communicate with the relevant departments of the US government and make disclosures if necessary.

China Ping An Insurance (Group) Co Ltd said in a statement that Ren Huichuan had resigned as executive director and vice-chairman of the company due to personal health reasons.

The story was written by Wang Xiaohan and Xu Jiangshan and first published at ATimesCN.com