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Global Supply Chain Can Now Breathe: China Is Back

As China battles the novel corona virus epidemic, people in the country are gradually returning to work now.

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As China battles the novel corona virus epidemic, people in the country are gradually returning to work now.

By Ma Peimin

Many people in Africa are worried that the novel coronavirus outbreak will affect China’s economy.

What is the trend of China’s economy in 2020? How best to minimise the impact of the epidemic on the economy has become a pressing concern for the nation. 

As China battles the novel coronavirus epidemic, people in the country are gradually returning to work now.

Businesses are actively adjusting their strategies. For instance, more restaurants are embracing delivery orders as sit-down sales fall.

Retailers are building up their online stores.

Car dealers are providing test drives without staff present. Some high-tech companies have launched or upgraded their cloud video conferencing products and services to facilitate remote work.

And some companies have adopted flexible working hours and rotating shift patterns to cope with the situation.

The Chinese government is providing full support for enterprises In the meantime, the China central government is providing full support for enterprises by adopting a series of financial and monetary policies.

Measures include setting up a special fund to refinance companies, increasing credit loans and reducing costs for fundraising for small and medium enterprises, private businesses and the manufacturing industry.

Many local governments have introduced such favourable policies as rent reduction and exemption, tax deferral and cutbacks on financing costs.

Foreign-funded companies, including Tesla, Starbucks and Nestlé, have also voiced their confidence in a market of 1.4 billion consumers and the world’s most comprehensive supply chain.

The impact of the epidemic on China’s economy will be temporary

The impact of the epidemic will be temporary since the fundamentals of China’s long-term economic growth and high-quality growth will not change.

As Richard Griffith, an economic historian with the International Institute for Asian Studies based in the Netherlands, pointed out, it is reasonable to believe that China’s economy will release greater development potential because its economy has shown strong resilience with

optimized structure and enhanced capacity of risk management.

China’s important position in the global industrial chain

In early February, Hyundai Motor had to suspend its own production line due to the temporary interruption of parts suppliers from China.

On February 17, with the resumption of work of some Chinese component manufacturers, Hyundai Motor decided to resume production on most of its production lines.

This news, shows China’s important position in the global industrial chain. At the moment when the epidemic prevention and control have achieved positive results, Chinese companies resume work and production, not only for themselves but also to keep the global industry chain gears running steadily and to safeguard the common interests of the world.

At present, with the exception of Hubei Province, enterprises in 30 other provinces in mainland China have resumed work and resumed production.

The Chinese government’s attitude towards this is very clear: to strengthen prevention and control in areas where the epidemic situation is particularly serious or at high risk, and non-epidemic

prevention and control areas should coordinate epidemic prevention and control and restore economic and social order.

This means that China does not relax the epidemic prevention and control, and at the same time, seeks truth from facts, and develops differentiated strategies by districts and levels to minimize the impact of the epidemic prevention and control on the people’s production and life and the global industry chain.

Scholars: Optimistic about the long-term development of China’s economy

According to a report by the McKinsey Global Institute, China is the number one export destination for 33 countries and the number one import source for 65 countries.

What to do if foreign companies that are anxiously waiting for China’s raw materials and components are not resumed in time to resume production?

What about foreign companies that regard China as an important market for resources?

Take Apple Inc. as an example. It has about 800 supplier factories around the world, about half of which are located in China. Most products, including the iPhone, are manufactured in China.

In an investor statement issued on the 17th, Apple said that all iPhone manufacturing partners in China have restarted production.

Due to the impact of the epidemic, Apple expects global iPhone supply shortages, but the company said: “I believe the impact of the business is only temporary.”

This is just as Robert Merton, a Nobel laureate in economics and a professor at the Massachusetts Institute of Technology, said in a recent open letter to the Chinese people: “We are optimistic about the long-term improvement of the Chinese economy. “

The writer is a reporter with China Media Group.

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