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China maintains its goal of GDP growth despite coronavirus exposure

UNITED STATES (OBSERVATORY NEWS) — China will be able to achieve its long-term goal of doubling GDP and income this year, despite the consequences of the outbreak of Coronavirus, said Cai Fan, deputy head of the PRC Academy of Social Sciences.

A virus outbreak will have a short-term effect on the economy, after which demand will recover quickly, Tsai wrote in an article for the People’s Daily newspaper.

“Although the temporary impact caused by the epidemic will somewhat reduce growth and other development indicators, it will not delay the fulfillment of the goal of building a moderately prosperous society,” the economist said.

According to him, the growth rate of about 5.7% this year will be sufficient to achieve the goal of doubling GDP and income.

The Chinese government should use policy tools in a timely and flexible manner and apply “non-traditional policy tools” to support the economy, Tsai added.

In 2019, China’s economy, the second largest in the world, grew by 6.1%. Growth rates have been minimal since 1990.

Earlier this week, Zeng Gang , vice chairman of the National Institute of Finance and Development, warned that a coronavirus outbreak in 2020 could slow China’s economic growth by 1 percentage point.

If the authorities’ response to the epidemic is sufficiently timely and effective, long-term growth trends will not suffer significantly, Zeng said.

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