Wei Jianguo: Balance work resumption and pandemic control
The outbreak of the pandemic has brought severe difficulties to enterprises. How can the government implement policies to truly benefit small and micro enterprises? How should companies, governments and individuals work together to overcome difficulties? China Business Network had an exclusive interview with Wei Jianguo, Vice Chairman of the China Center for International Economic Exchanges and former Vice Minister of Commerce.
China Business Network: How do you assess the impact of the pandemic on the economy as a whole?
Wei Jianguo: Generally speaking, this pandemic will have a significant impact on the GDP growth in the first quarter. Some experts said that the GDP growth will be lower than 5% but I think this is unlikely to happen because the hard-hit industries are concentrated on tourism, catering and transportation, especially during the Chinese new year festival. As for industries such as high-tech and machinery manufacturing as well as infrastructure construction, the impact will not be so disastrous.
The pandemic will have a serious impact on certain industries in the first quarter, but the GDP growth is unlikely to be under 5%. The tasks and goals of economic and social development designated by the Party Central Committee will be achieved and the GDP growth will remain at about 6%.
China Business Network: Some export-oriented enterprises and small, medium and micro enterprises, including manufacturing, have encountered difficulties in terms of labor, social security, rent, taxes and so on. These problems may last for two to three months, or even longer. The government has launched policies to help the affected companies, will this work? Or companies should rely more on themselves?
Wei Jianguo: Currently, the situation facing small and medium-sized enterprises is extremely difficult and they should work together to go through this hardship. Apart from the government’s help, they should help each other. Taking the export-oriented enterprise as an example. If they reject the orders of foreign clients because of the current problems they have, they might lose the clients for good. Instead, all the companies should act like a team and help each other to take the order and get things done. By doing so, they will not lose their market share because of the pandemic. It will take them more time and money to win the clients back later on if they reject the orders now.
China Business Network: Indeed, it is not that easy for export-oriented enterprises to acquire new foreign customers. If they stop doing business with these companies because of the pandemic, the impact will be fatal.
Wei Jianguo: The government will also offer various financial supports, such as financial credit, tax reduction and exemption, rent reduction and so on. However, the most important thing is that companies should help each other to get through this difficult period.
China Business Network: Generally speaking, it is not easy for small and grass-roots companies to get loans, do you think that these supporting policies offered by the government will be able to help them? How do you see these supporting policies?
Wei Jianguo: We need to understand that the impact of the pandemic is short-term and temporary and we should not be intimidated by the difficulties we have now.
However, we must pay attention to the problems and contradictions encountered and solve them with innovative ideas. Indeed, it is hard for small companies to get a loan, but the government can lend them capital in the form of a fund, which will help them to get a loan from the bank. The companies can return the government the fund in the future. Furthermore, the government also needs to use innovative thinking to increase consumption. The current pandemic is an important test for us and the old model and way of thinking can no longer be used to deal with it. Therefore, governments at all levels should follow the command of the Communist Party and shoulder their responsibilities.
China Business Network: From the perspective of the enterprise, they need to resume production gradually. How can they prevent and control the pandemic while resuming work?
Wei Jianguo: The question you raised is very important. I think the most important thing is that we do not use the “one-size-fits-all” approach. We can not stop everything completely just because we need to control the pandemic. We should resume work on a case-by-case basis. If the migrant workers do not have symptoms such as fever and cough, and they do not come from Hubei, then they should be allowed to start work. They can work in shifts with fewer hours. Providing that the workers are under good protection, companies need to consider how to reduce costs, acquire new orders and expand operations.
It took us a lot of effort and time to create a transparent and unified market after the launching of the reform and opening-up, we should not let the temporary difficulties defeat us.
China Business Network: In fact, we have seen that many large companies demonstrated a great sense of responsibility during the pandemic. On the one hand, they made a lot of effort and on the other hand, they are taking good care of their employees. How can companies, governments and individuals collaborate effectively? What is the relationship between government and business? How can the government understand the needs of companies and make accurate decisions?
Wei Jianguo: A very important thing is to clarify our current directions and tasks, and make proper adjustments as the pandemic develops. The situation we face is very serious. During his recent inspection in Beijing, President Xi said we must have confidence in fighting against the pandemic and take more decisive measures. The government will play a bigger role in this regard and work together with the general public.
Enterprises play a key role in the fight against the coronavirus. They must cooperate with the government. At the same time, they also need to survive and develop further. Therefore, the government proposed that when the time is right, companies should resume work as soon as possible.
China Business Network: how will this pandemic change the structure of China’s economy and industry?
Wei Jianguo: I think it will promote China’s economic development and speed up its further reform and opening-up. I also believe that this pandemic has given us more confidence and determination to complete the tasks set out in 2020. I do not agree with the views of some experts and scholars, saying that the pandemic may have a serious impact on China’s reform and opening-up and its exports this year. I think that these difficulties are temporary and we will overcome them. Victory belongs to us if we do everything right when the pandemic is over.
China Business Network: Where does this confidence come from?
Wei Jianguo: The fundamentals for long-term improvement of China’s economy remain unchanged, I am very confident about that. We will not be intimidated by the temporary difficulties. With the leadership of the Party Central Committee, especially Chairman Xi, I have great confidence in this year’s economy.
China Business Network: What can we learn from this pandemic? In particular, what needs to be improved in pandemic prevention and control mechanism?
Wei Jianguo: I think that there are two important points. One is that all the people should take a new lesson in pandemic prevention and control because prevention is more important than treatment.
Another important point is that coordination and communication among different departments are not good enough. If certain issues are not solved timely, it will affect the battle against the pandemic. We should learn from this.
China Business Network: In your opinion, when will these problems be mitigated or resolved?
Wei Jianguo: some of the problems I mentioned above have already been resolved, such as the overall deployment of pandemic prevention materials, the release and supplement of medical supplies, and give priority to Wuhan and Hubei. This pandemic showed us that as the second-largest economy, China has a significant influence on the world. We must do things right in both the short-term and long-term. We will sum up experience to further improve ourselves after the pandemic.
China Business Network: China has been advocating for reform, innovation, and high-quality openness, how will this pandemic affect the entry of other countries to China?
Wei Jianguo: The impact of the pandemic is temporary and the difficulties will be overcome soon. Some foreign companies worry about the impact of the pandemic, this is understandable. However, China will not close its door just because of the pandemic. On the opposite, China will be more open to other countries. In particular, China will promote high-quality economic development through a high-level of opening-up. The implementation of supply-side reforms will not be changed. I believe that China will be more open and develop faster after the pandemic, which will become a good experience and benchmark in human history.