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Mixed impact on online business

By Liu Jianna | China Daily | Updated: 2020-02-19 07:28
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SONG CHEN/CHINA DAILY

Editor's Note: Online businesses, especially online education, office and shopping, have boomed in the wake of the novel coronavirus epidemic in China and beyond. Will this bring about lasting changes in China's economic landscape? Three experts share their views on the issue with China Daily's Liu Jianna. Excerpts follow:

Chance to promote online businesses

Compared with offline businesses, internet-based businesses are not only more efficient and cost-effective but also enable technological breakthroughs which were unimaginable in the past. For instance, thanks to the application of technologies including big data and the internet of things, consumers now know the transportation route, raw materials and the industrial chain of the products they buy online, which has greatly improved transparency and guaranteed due liability.

This is not just a simple offline-to-online transformation, but a reshaping of the whole industrial chain. And without undermining the threats posed by the novel coronavirus outbreak, we should not ignore the opportunities it has created for the development of the digital economy.

There is a wide consensus on the importance of developing the digital economy. The problem is that not all people know how to apply and operate advanced technologies and there is a lack of mature business and management models to effectively transform the conventional economy. The epidemic is expected to prompt traditional industries to digitalize faster and explore more ways to digitalize their operations as shown by the development of online medical care in recent days.

The combat against this epidemic has greatly been promoting the development of digital society such as online business and online office and online education, and has accelerated the maturity of the social credit system.

The credit system can quickly reduce the cost of social management and production management. But while digitalizing their operations, enterprises should be fully aware of the risks since the supporting policies, laws and rules may lag behind the development of businesses.

Shi Yufeng, a professor at the Institute for Financial Studies at Shandong University, president of Shandong Big Data Research Association

Digital economy won't remain unscathed

Online businesses will not remain unscathed by the novel coronavirus outbreak even though they may be less affected than offline businesses, particularly because many people's incomes are expected to be significantly reduced, and some people could even lose their jobs.

Online businesses cannot possibly continue to flourish at a time when people's incomes drop and the overall economy takes a turn for the worse.

In the following months, online education, telecommuting and shopping may remain popular, but the epidemic is likely to affect China's economic growth in the first quarter of 2020 with the service and manufacturing sectors taking the biggest hits, even in the best-case scenario. So production should be resumed or increased only after people's safety is ensured with strict measures.

The key is to strike a balance between productivity and people's health and the central and local governments' different concerns. For those enterprises that have been the worst affected by the epidemic, the central government has already introduced support policies. But whether the local finance departments can strictly implement those policies in these difficult times remains to be seen.

Chen Fengying, a senior researcher at the China Institutes of Contemporary International Relations

Real economy remains strongest pillar

While the novel coronavirus epidemic is certain to be a drag on the economy, especially labor-intensive industries, there is no denying that online businesses are replacing offline businesses to meet people's consumption needs. Yet we hope the epidemic is controlled as quickly as possible and people are not forced to turn to online businesses for all their needs, as the real economy remains the strongest pillar of the overall economy and the main job provider in China. Plus, the majority of offline businesses, services in particular, cannot be transformed into online businesses.

The epidemic, however, has prompted a number of enterprises to use innovative ways to improve their business operations. For instance, many food deliveries are no longer handed over face to face, and some furniture companies have started displaying and selling their products online. But hopefully this "new normal "should not last long.

Bai Ming, deputy director of the International Market Research Institute at the China Academy of International Trade and Economic Cooperation

The views don't necessarily reflect those of China Daily.

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