While uncertainties in the prevention and control of COVID-19 continue to challenge the Chinese and global economy, China’s economy remains predictable and controllable. Experts predict that it is capable of returning to normal soon and sustaining longterm growth.

Liu Yuanchun, vice president of Renmin University of China, said that according to the history of epidemics over the past century, the economic impact of an epidemic usually has negative spill-over effects on only certain fields over a short period of time. In other words, it does not cause the systemic deviation of a large economy from its potential growth rate.

Liu explained that when assessing a country’s medium- and long-term development tendency and its potential growth rate, many factors need to be taken into account, including capital stock, technical progress, efficiency of resource allocation, and labor force and human capital. To be specific, the rate of capital accumulation depends on the national savings rate, and the way of accumulation and the update rate of the physical capital stock will not be fundamentally changed by a short-term epidemic. An epidemic has little impact on the labor force and human capital; neither will it stop education.

More importantly, Liu said that the outbreak has reminded people of the importance of technological innovation and investment in public health and municipal infrastructure. As such, China’s economy is flexible and resilient. With strong defensive and self-healing abilities, the economy of China can overcome obstacles and risks and return to normal soon.

David Daokui Li, Mansfield Freeman Chair professor from the School of Economics and Management at Tsinghua University, said that the economic impact of COVID-19 is controllable. If things normalize in the first quarter, the epidemic’s impact on annual GDP growth is estimated to be -0.17%. Therefore, the key lies in resumption of work and production. Apart from the manufacturing, construction and transportation industries, the traditional service industry and modern service industries including finance, accounting, auditing and higher education also need to resume work as soon as possible.

Since the outbreak, the central government has rolled out supportive measures to ease the financial burden on firms, including reducing taxes and fees, exempting enterprises from paying part of their social security fees, and granting special loans to small and micro enterprises.

To prevent large-scale unemployment, stabilize the consumer demand and help firms weather this difficult time, Wang Yiming, a member of the economic committee of the 13th CPPCC National Committee, suggested providing a bailout for smalland medium-sized enterprises as a way of subsidizing firms in trouble. What’s more, fiscal policy should be stepped up, such as issuing special bonds for commercial banks and increasing local government special bonds.

Focusing on short-term relief and stabilizing China’s economy, Liu emphasized that as infrastructure is a pillar of stabilizing investment, and as stabilizing investment is the key to maintaining stable economic growth in 2020, investment in infrastructure will play a big role in helping China reach its economic growth target.

Featuring 5G, AI and the internet of things, the new type of infrastructure construction enjoys a vast market. Investments in these fields help accelerate work resumption, said Ting Lu, chief China economist at Nomura. However, moderation is essential. Nation-wide compulsive investing should be avoided. What’s more, technological analysis of the efficiency of investment should also be carried out.

To ease the economic impact of the pandemic necessitates boosting domestic demand. As China develops, the enormous potential of domestic demand needs to be further tapped, Li noted. Currently, China’s middle-income population merely consists of 400 million people. If we can get the remaining one billion people into this income group, the domestic demand will be fully activated, and China’s economy will be even more resilient.

（Edited and translated by NIU XIAOQIAN）