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Published On: Thu, Mar 12th, 2020

COVID-19: Economic Consequence on China’s Economy Transitory, Manageable

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By Zhou Pingjian

This year marks the 20th anniversary of the establishment of the Forum on China-Africa Cooperation (FOCAC). Since its inception in 2000, the FOCAC has become an important platform for collective dialogue and an effective mechanism for practical cooperation between China and Africa, maintaining a leading position in international cooperation with Africa. The 2018 FOCAC Beijing Summit was a great success, and China-Africa leaders unanimously decided to build an even stronger China-Africa community with a shared future through win-win cooperation, defining the general direction of joint efforts.
After years of accumulation, the results of the FOCAC have spread all over Africa. As the most populous and biggest developing country in the world, China takes deep pride in its ever stronger partnership with Nigeria, the most populous and biggest developing country in Africa. Since the establishment of diplomatic ties in 1971 and strategic partnership in 2005 in particular, the all-round, wide-ranging and high-quality bilateral cooperation between China and Nigeria has been a pace-setter for China-Africa cooperation. In recent years, thanks to the strategic guidance and personal commitment of President Xi Jinping and President Muhammadu Buhari, China and Nigeria have significantly enhanced political trust and secured fruitful outcomes in practical cooperation. China-Nigeria relations are at their best time in history and face new opportunities of growth.
In 2019, the two-way trade between China and Nigeria reached 19.27 billion US dollars, which was around 1900 times that of 1971when the diplomatic ties was established. And the trade growth rate was 26.3%, ranking first among China’s top 40 trading partners. China’s imports from Nigeria increased by 43.1%. In 2000, Nigeria’s trade with China accounted for a mere 1% of the total of Nigeria’s foreign trade. In recent years, China has become Nigeria’s top trade partner. These numerous achievements show that China-Nigeria cooperation definitely has enormous potential in the future.
The COVID-19 outbreak is a major public health emergency for China, one that is fastest spreading, most widely affecting and most difficult to contain since the founding of the People’s Republic on 1 October 1949.
Under the strong leadership and personal guidance of President Xi, the whole country is waging a united battle against the epidemic. Guided by the recognition that mankind is a community with a shared future, the government has taken the most comprehensive, rigorous and thorough measures, many of which have far exceeded what WHO and International Health Regulations required. Through arduous efforts, the epidemic is generally under control, and the positive trend in the prevention and control work is now expanding. We have the full confidence, capacity and determination to not only win a full victory against the epidemic but also meet China’s economic and social development goals.
The epidemic has indeed brought various challenges to China’s economic and social development, but the impact will be short-lived and generally manageable. China’s economy is resilient and full of vitality. It will not be reversed by the epidemic. Its long-term upward trend remains unchanged, and the fundamentals supporting China’s economic development will not be easily shaken.
First, China’s economy has a solid foundation. In 2019, China’s GDP stood at $14.4 trillion, increasing by 6.1%. This growth rate is much higher than the world average. It is in fact the highest in the trillion-dollar club. Over the years China has been contributing about 30% of world economic growth. China is the world’s largest trader of goods, biggest holder of foreign exchange reserves, the biggest tourism market, second largest destination for foreign investment and a major trading partner with over 130 countries. China is the only country in the world that has all the industries under the industrial classifications issued by the UN. China has the world’s most extensive high-speed rail network, with the length of rails in operation reaching 35,000 kilometers. That’s more than two thirds of the world’s total high speed-rails.
Second, China has enormous potential for further development. In 2019, China’s per capita GDP passed the 10,000-dollar line for the first time in history. China’s enormous market, with more than 1.4 billion people and 400 million middle-income consumers, is a unique strength. Domestic demand makes a 89% contribution to economic growth and the contribution of the final consumption expenditure to GDP was 57.8 %. Retail sales of consumer goods in China have exceeded 40 trillion RMB yuan. Going forward, consumption will play an even bigger role in driving China’s economic growth. China has seen thriving development in digital economy, cyber economy and sharing economy. In 2019, on-line retail sales increased by 19.5% year-on-year.
Third, China is opening up wider to the world. In 2019, the total value of imports and exports of goods reached 31.6 trillion RMB yuan, up by 3.4% over that of the previous year and the foreign direct investment actually utilized totaled 941.5 billion yuan, up by 5.8%. The Foreign Investment Law and its implementing regulations took effect on January 1 this year. This law further broadens market access for foreign investment, increases imports of goods and services, enhances protection of IPR and increases openness in the financial sector. In January, China and the United States reached the phase-one economic and trade agreement. This agreement is in line with market and business rules as well as WTO rules. It is beneficial to China, to the US, and to the whole world. China is taking further steps to open up its market, explore new frontiers and improve business environment, including treating all locally registered businesses as equals.
Fourth, this year marks the end of the 13th Five-Year Plan and China is set to achieve its goal of completing the building a moderately prosperous society in all respects. In 2019, significant achievement has been made in poverty alleviation. The number of rural population living in poverty at the end of 2019 was 5.51 million, 11.09 million less compared with that at the end of 2018, and the incidence of poverty was 0.6%, 1.1 percentage points lower than that of the previous year.
Fifth, as the epidemic is gradually under control, the previously suppressed consumption and investment demands will be fully released and economic growth will rebound rapidly. They have merely been postponed, not lost. For instance, growth of retail sales dived to 4.3% in May 2003, when the Severe Acute Respiratory Syndrome (SARS) affected the country. However, two months later, the growth jumped to 9.8%. In addition, the industries related to epidemic prevention and control have grown strongly, and the potential of new industries and forms of business has been released, which will become a new growth point.
The COVID-19 comes and will go. The outbreak is just temporary, but friendship and cooperation are forever. China will always remember the sympathy and support given to us in this battle against the virus.
Guided by the principle of upholding justice while pursuing shared interests and the principle of sincerity, real results, amity and good faith, China remains committed to working with Nigeria to implement the outcomes of the FOCAC Beijing Summit and advance the Belt and Road cooperation for common development. We will continue to do whatever we could to support Nigeria in achieving independent, sustainable development and realizing the Nigerian dream at an early date.

(Dr. Zhou Pingjian is Ambassador of China to Nigeria)

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