Why this is important to Wisconsin businesses: The government is increasing market access for foreign capital and supporting increased imports, among other measures.
According to data provided by the Chinese Ministry of Industry and Information Technology, as of the end of March 2020, about 98.6% of large companies in China have restarted production, with 89.9% of employees having returned to work and over 76% of small and midsize companies having restarted work. As of March 30, according to the Ministry of Commerce, more than 60% of major foreign-invested manufacturing firms and over 66.9% of key foreign-funded service providers out of Hubei Province had recovered over 70% of work capacity.
Analysts at Goldman Sachs recently forecasted that for the first quarter of 2020, China’s GDP may fall short by 9% of the amount for the same period in 2019. The World Bank's updated economic report for the East Asia and Pacific region also projected that China's economic growth would decline to 2.3% in the baseline scenario and 0.1% in the lower-case scenario in 2020, down from 6.1% in 2019. Under these circumstances, the Chinese central government and local governments would be expected to roll out a series of economic stimulus measures. On March 27, a key meeting of the Political Bureau of the CPC Central Committee, presided over by President Xi, underlined the importance of further macroeconomic policy adjustment and better implementation to counter impact from the outbreak. The meeting also called for adequate implementation of various tax and fee cut policies and an acceleration of the issuance and use of special bonds issued by local authorities. In addition, the meeting has clearly stated that further steps may be taken to unleash demand from the domestic market and expand consumer consumption. The government will also strongly support the constructions of infrastructure.
Due to the sharp decline in global trade, the Chinese mechanical and electrical, transportation equipment, energy and chemical industries saw their import volumes shrink during February and March. The Ministry of Commerce has emphasized that China will continue to encourage imports of advanced technology, equipment, and key parts and components, and to support the upgrade of manufacturing and service industries, as well as increase imports of energy resources to enhance the supply system. It will also purchase more foreign agricultural products and food to meet the nation's surging consumption demand.
On April 3, the Ministry of Commerce released a notice reiterating the intention to stabilize foreign trade and investment, as the COVID-19 pandemic has posed severe challenges to the global economy. It said market access for foreign capital will be continuously increased by shortening negative lists (which identify sectors where foreign capital is restricted) and expanding the catalog of industries where foreign investment is encouraged. Manufacturing, high-tech, energy conservation and environmental protection, as well as service industries, are some of the fields aiming to attract more foreign investors. Pilot free trade zones will play a role in opening up, backed by policies benefiting foreign trade. It also called for boosting, and development of the Hainan Free Trade Port.
Meanwhile, the China Council for the Promotion of International Trade will also organize online and offline business events and foster international cooperation to assist domestic manufacturers encountering problems in restoring their industrial and supply chains, and will seek foreign suppliers to relieve pressure caused by the pandemic.
On March 24, the U.S. Department of Agriculture and the Office of the U.S. Trade Representative announced continued progress in the implementation of the agriculture-related provisions of the U.S.-China Phase One Economic and Trade Agreement. This will also promote the exporting of agriculture-related products to China. https://china.usembassy-china.org.cn/usda-and-ustr-announce-continued-progress-on-implementation-of-u-s-china-phase-one-agreement/