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Regional refocus an option

By Bo Leung in London | China Daily | Updated: 2020-05-21 10:04
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Rana Mitter. [Photo/China Daily]

COVID-19 outbreak may prompt China to look closer to home for economic lift

China could look at strengthening relationships with countries in the region following the COVID-19 outbreak, said leading British academic Rana Mitter.

"The biggest effect in the short term on China, as with other countries, has been a downturn in the economy," said Mitter, director of the University of Oxford China Centre.

"One of the things we will be looking out for is what the new growth target will be, and there is a possibility it might be set over two years rather than one."

Mitter said the issues could be raised at the two sessions, the annual meetings of the National People's Congress and the Chinese People's Political Consultative Conference. The two sessions were postponed from early March because of the pandemic.

He said one way China can achieve its growth target is to increase domestic consumption.

China also needs to find ways to make sure that its supply chain and its ability to continue to produce high-value equipment, including technology, is not hindered.

To achieve that, he said, it cannot simply be done within China's borders.

"It is also very necessary that the connections with places like South Korea, for instance, are boosted. I think that concentration on a policy aimed toward the region is going to be likely and stressed perhaps even more than it would have been before the COVID-19 pandemic."

As some countries continue to grapple with the novel coronavirus and with fears of a second wave, Mitter believes a variety of economic factors, ranging from travel to supply chains, will have to be managed more carefully.

For China to continue to play a vital role in economic development, confidence must be restored with regional economic partners.

"It is perhaps better that there is a slow but steady rebuilding of travel links, exports and cargo ships and so forth, rather than trying to ramp up very quickly and then having to pull back," Mitter said.

In the current situation, reliability and predictability were almost more important in the short term, he said, adding that these could "help reassure regional partners".

As China's attention partly moved toward pumping short-term credit into the local economy, Mitter said regional partners would want signals as to how China's foreign direct investment strategy is going to change after COVID-19.

He said the partners need to get "fairly reliable medium-term" guidance on what to expect in order to start planning for the future.

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