China Braces For Inevitable Big Hit To Economy From Coronavirus, Says President Xi Jinping

China will step up policy adjustments to help cushion the blow to the economy from a coronavirus outbreak that authorities are still trying to control, President Xi Jinping was quoted as saying on Sunday. Chinese policymakers have rolled out a raft of measures to support an economy jolted by the virus, which is expected to have a devastating impact on first-quarter growth. 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 the president 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, which has infected nearly 77,000 people and killed more than 2,400 in China, 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.

China's economic growth may show a sharp slowdown in the first quarter, probably dipping to 3% or even lower from 6% in the previous quarter - which was the weakest pace in nearly 30 years, economists estimated. Some forecasters also say there is a growing risk the economy could contract in the first quarter from the previous three months, as factories have been slower than expected to resume production due to shortages of staff and raw materials.

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. He highlighted the importance of fighting the epidemic in the capital Beijing, which has recently required people arriving from elsewhere in China to be quarantined at home for 14 days.

"The safety and stability of the capital is directly related to the overall work of the party and the state," 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.