China’s gross domestic product contracted by 6.8 percent year-on-year in the first quarter of this year because the Coronavirus outbreak seriously disrupted economic activity, the National Bureau of Statistics said.
To begin with, the epidemic has caused market adjustments and an industrial transformation. In recent years, the Chinese economy has faced the problem of excess production capacity, which the supply-side structural reform launched in 2015 is aimed at solving.
The outbreak has also disrupted the market and supply chain by forcing enterprises to optimise their business and operation models, while boosting online businesses and the cloud office.
Some sectors such as video-teleconferencing, online education and medical services have developed rapidly, because of the stringent restrictions imposed by authorities on the movement of people and vehicles to prevent and control the spread of the virus. Also, the significance of manufacturing and hi-tech industries has drawn greater attention than before. The epidemic has had a huge impact on the global supply chain. But because the Chinese economy is highly resilient, it is easier for it to recover compared with many other countries. Also, the impact of the epidemic on production in China is likely to be temporary, but the disruption in the global industrial chain will have a long-term and profound effect.
Although the outbreak has exposed many problems, it has also deepened mutual understanding and cooperation among governments at various levels and enterprises. These bodies are indispensable to each other and both sides need self-improvement to cope with the negative effects of the epidemic. Therefore, for its long-term economic and social development, China needs to improve the efficiency of both the market and the governments.
The pandemic has caused huge losses to society, but it has also created opportunities for change. The enterprises should seize the chance for further development that will benefit not only the enterprises but also the entire country.