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MACRO: Beijing calls for key industries to resume asap

China’s central government has called for “business resumption, especially in key industries, as soon as possible”, even though the battle against the Novel Coronavirus Pneumonia (NCP) is still ongoing, senior officials from four top-level governing bodies including the National Development and Reform Commission (NDRC) stated at a joint press conference in Beijing on February 11.

“The industries that are crucial to citizens’ daily needs and the national economy should resume operations immediately, and major construction projects should make sure that contractors and workers are back at their posts as soon as possible so that they can return to normal working order,” Cong Liang, NDRC secretary general said at the press conference.

Exempted from the request however would be Wuhan, the epicentre of the virus outbreak, and the wider Hubei province in Central China where the battle against the contagion would remain the core task and the priority, he clarified.

As of February 10, 76% of factories manufacturing medical masks had resumed production, 77% of protective suit producers were back at work, 94.6% of food and processing factories had restarted their operations, and 57.8% of coal mines had restarted production, according to a survey among 22 provinces inside China, Cong shared, indicating that these are among the crucial industries that need to resume normal order the soonest.

Airlines, railways and water transportation networks are back to normal operations too, he added. As for land transportation via trucks, Xu Yahua from China’s Ministry of Transport shared that trucks carrying medical supplies and daily necessities to areas that have been hit severely by the virus will be granted green lights all the way. The trucks have not been stopped for checks or been required to pay toll charges, Xu stressed, saying they have been given way for fast delivery.

Nationwide, the NCP outbreak has stopped public transportation in 428 cities throughout 27 provinces, but by February 10, a total of 18 provinces had gradually resumed public transportation services, and provinces such as Sichuan, Guangdong, Hunan, Shandong, Jiangsu, and Fujian had reopened their highways to coach transportation, according to Xu.

He predicted that by February 18 a total of 160 million passengers would be traveling by coach, rail, and air back to the cities where they work and that to avoid mass infection, temperature checks should be conducted and sufficient space between passengers should be guaranteed.

Cong acknowledged the risk of mass infection because of the cumulative travel for the resumption of operations for many industries but stated that the suspension of many businesses for the time being can’t be sustainable longer term either. Any prolonged halt would seriously undermine the country’s ability to distribute medical supplies and daily necessities and that in the end, it will only hurt the interests of citizens, he said.

No officials at the press conference ventured to estimate the impact to China’s economy of the nearly three weeks’ freeze on commerce and industrial production mainly because of the virus outbreak, though some economists anticipate some difficulty for China to maintain GDP growth at 6% for 2020. Moreover, uncertainties remain about when the virus outbreak will be under control, with some estimating within next month while others are guessing not until April.

As of February 11, China had confirmed 44,653 virus cases, with 4,740 of those infected now cured and 1,113 died. As of Tuesday, the number of suspected cases totaled 16,067, though the growth of new confirmed cases has been declining over the past few days, according to statistics from China’s National Health Commission.

Written by Hongmei Li, li.hongmei@mysteel.com

Edited by Russ McCulloch, russ.mcculloch@mysteel.com