China braces for inevitable big hit to economy from virus, says Xi

BEIJING (Reuters) – China will step up policy adjustments to help cushion the blow on the economy from a coronavirus outbreak that authorities are still trying to control, President Xi Jinping was quoted as saying on Sunday.

FILE PHOTO; Chinese President Xi jinping speaks during a meeting with Tedros Adhanom, director general of the World Health Organization, at the Great Hall of the People in Beijing, China, January 28, 2020. Naohiko Hatta/Pool via REUTERS

The situation is showing a positive trend after arduous efforts but there is no room for “weariness and relaxed mentality” among officials, state television quoted him as saying.

“At present, the epidemic situation is still severe and complex, and prevention and control work is in the most difficult and critical stage,” Xi said.

“The outbreak of novel coronavirus pneumonia will inevitably have a relatively big impact on the economy and society,” Xi said, adding that the impact would be short-term and controllable.

The outbreak is one of the most serious public health crises to confront Chinese leaders in decades.

“For us, this is a crisis and is also a big test,” Xi said.

Chinese policymakers have implemented a raft of measures to support an economy jolted by the virus, which is expected to have a devastating impact on first-quarter growth.

Low-risk provinces should focus on restoring work and production in an all-round way, provinces with medium-level risks should aim for an orderly work resumption, while high-risk regions should focus on epidemic controls, Xi said.

The government would step up policy support to help achieve economic and social development targets for 2020, Xi said.

China would maintain a prudent monetary policy and roll out new policy steps in a timely way, he said, adding the government would also study and roll out phased tax cuts to help tide small firms over difficulties.

The government would also take steps to support flexible employment and help college graduates to find jobs, Xi added.

Reporting by Yingzhi Yang and Kevin Yao; Editing by Frances Kerry and Alex Richardson

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