With coronavirus outbreak hitting China’s economy, the US must pull its weight to ensure global growth

More policy accommodation in the form of easier credit and fiscal stimulus from Beijing looks likely

The Federal Reserve must go the extra mile and consider another interest rate cut while Trump must resolve the trade war with China

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A man wearing a mask walks down Nanjing Pedestrian Road, a popular shopping area, in Shanghai, on January 24. Photo: Reuters

Published: 1:00am, 4 Feb 2020Updated: 6:24pm, 14 Feb 2020

It’s a popular notion that night is darkest just before the dawn, the belief that things appear at their worst just before they start getting better. China’s economy may be suffering short-term challenges due to the coronavirus outbreak, but the economy will eventually spring back once the crisis is over.

In the meantime, a strengthening US economy can help pick up the slack for global growth until China gets back to normal. Mutual help can go a long way and an end to trade war hostilities between Washington and Beijing would be a great place to start. Everyone needs to do their bit.

Nobody really knows at this stage how the crisis will pan out and what damage the coronavirus is doing to the global economy. But with some of the more pessimistic projections suggesting that up to 1 to 2 percentage points might be knocked off China’s growth rate in the first quarter, it’s not good news for an economy where growth has been losing momentum in recent years.

Beijing is working hard to fight the outbreak and more policy accommodation can be expected. Easier credit, more fiscal stimulus and a weaker renminbi exchange rate look likely, but other countries must chip in too.

China and the US both have a common interest in promoting faster global growth. There’s no room for complacency and just hoping that recovery fires up spontaneously is not enough.