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Former Chongqing mayor Huang Qifan is now deputy head of the China Centre for International Economic Exchanges, a Beijing-based think tank. Photo: Xiaomei Chen

Coronavirus: China’s ‘sober-minded’ officials urged to focus on domestic recovery, not international disputes

  • Outspoken former Chongqing mayor Huang Qifan says China should ‘find new opportunities from the crisis’ to aid its domestic recovery
  • Issues over the origin of the virus, compensation claims by the United States and decoupling worries have all appeared in the wake of the outbreak

China’s officials must stay “sober-minded” to handle the variety of coronavirus-related challenges that lie ahead, as mistakes could undermine relations with major developed nations and harm the country’s economic outlook, according to outspoken former Chongqing mayor Huang Qifan.

Issues over the origin of the virus, compensation claims by the United States and decoupling worries have all appeared in the wake of the outbreak, but for Huang, the government should focus on domestic recovery after China’s economy shrank by 6.8 per cent in the first quarter of 2020.

China should “find new opportunities from the crisis” to proceed with structural adjustments, develop emerging industries and city clusters, as well as improve weak links in the economy, added Huang, who retired from a senior position with the National People’s Congress Standing Committee two years ago.

Huang conceded that some challenges from Western countries stemming from the coronavirus need special attention, and even retaliatory measures, although some deserve nothing but ridicule.

Compensation demands by the United States were only to grab eyeballs and cheer itself up. We don’t have to respond tit-for-tat
Huang Qifan
The US has threatened further trade sanctions against China, as bilateral disputes over the origin of the virus and calls for compensation continue.
Reports suggest White House officials have discussed the idea of cancelling all or part of the US$1.1 trillion debt owed to China as a form of compensation for the outbreak, which in turn raised the question if China should cut its holdings of US Treasury securities.

Huang, though, said China should not rush to make a decision on whether to trim its holdings.

“Compensation demands by the United States were only to grab eyeballs and cheer itself up. We don’t have to respond tit-for-tat. It didn’t affect the whole situation, nor undermine China’s domestic affairs,” said Huang, who is now deputy head of the China Centre for International Economic Exchanges, a Beijing-based think tank.

“It is very hard to disengage from China. The United States can’t risk rolling back its industrial chains, economic and social structures to three decades ago.”

The US, once China’s top export destination, dropped to third in China’s first quarter trade data behind the Asean bloc and the European Union, in large part due to the trade war between the world’s two largest economies.

However, a lack of cheap labour, land and adequate infrastructure are hindering the return of manufacturing to the US.

“You can’t force the relocation of hundreds of thousands of products because of the pandemic. That shows nothing but the stupidity of populism,” he said.

Domestically, the nationwide lockdown led to rising unemployment, a sharp economic contraction and, more importantly, raised the question if China’s 40-year economic miracle can be sustained.

Economic recovery solutions and post-coronavirus external relations remain key issues set to be discussed at the National People’s Congress (NPC), which will convene its annual session on May 22 after a postponement of two months.

Beijing has pledged greater policy support for the economy, with additional debt issuance and higher government spending planned in addition to continued credit support for small businesses.

The government is expected to announce its economic targets – including the fiscal deficit ratio and number of jobs it wants to create, and possibly a gross domestic product (GDP) growth target – at the NPC.

Huang predicted that China’s deficit ratio would rise to 3.5 per cent of GDP from last year’s 2.8 per cent, and that another 1.5 trillion yuan (US$211 billion) of special Treasury bonds would also be issued to help fund an economic support plan.

This article appeared in the South China Morning Post print edition as: Officials urged to focus on domestic recovery, not global disputes
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