Policymakers need to fight outbreak and take care of business

The annual back-to-work mass movement of people after the extended Lunar New Year holiday has become a defining event of China’s battle against the deadly new coronavirus outbreak.

The return of up to 160 million from their hometowns towards coastal regions is unfolding in defiance of an epidemic that is far from being brought under control. Indeed the adoption of new diagnostic methodology has seen a sharp rise in official infection and death figures.

The return to work marks a resolve to safeguard China’s slowing economic growth and the global economy that depends on it.

This is a political imperative that prompted a morale-boosting public appearance by President Xi Jinping, wearing a blue mask. It was a telling demonstration of the level of official concern about the threat to stability and the need to calm worried residents.

Xi’s key message was aimed at boosting national confidence. He emphasised that the fundamentals of China’s economy remained sound despite the pressure of enforced closures and lay-offs and disruption of supply chains.

He is reported to have reinforced the message at the third sitting of the Politburo Standing Committee since the crisis began, asserting that there had been positive changes and results in combating the virus. He said that for most of the country the focus should be on getting back to business and social and development goals must be met.

The official statement following the meeting made clear that Xi acknowledges the magnitude of the political challenge posed by the outbreak, calling it a “major test” of the governance system from which officials must learn lessons.

Chinese medical staff paying ‘too high a price’ in coronavirus battle

Bureaucratic issues arising from initial reporting and response to the outbreak, including the treatment of a whistle-blower doctor, must be the subject of some of those lessons. At the same time the party’s inner ruling circle has underlined areas to watch, from food supply to creating jobs for graduates to maintenance of social and economic stability.

The return to work puts coastal manufacturing hubs such as Shenzhen and Shanghai – hosts to armies of migrant workers from regions nearer the epicentre of the outbreak in Hubei province – on the front line of the battle.

It calls for the diligent application of a range of precautionary measures. The city governments of Zhongshan and Foshan in Guangdong province have opted to postpone the resumption of work until March 1.

Small and medium-size enterprises are most at risk from efforts to bring the outbreak under control in terms of financial reserves against loss of revenue. Because they account for the lion’s share of China’s gross domestic product and new jobs, policymakers must move quickly and decisively to do whatever is necessary to halt contraction and limit casualties in this sector.