World needs to enhance macro policy coordination with responsibility to cope with pandemic

By He Yin

The global economy is facing huge pressure as almost every country in the world is suffering from the COVID-19 pandemic.

Under such background, it remains an important topic that how the world, while jointly combating the virus, should enhance the hedging of macro policies through cooperation, minimize the impacts from the pandemic on world economy and avoid the secondary hazards of the economic downturn. It addresses both the present and the future.

In a sense, the COVID-19 pandemic is also an economic emergency. The Institute of International Finance revised down its growth forecast for the world three times in a month, and the International Monetary Fund (IMF) believes that the coronavirus pandemic will turn global economic growth “sharply negative” this year, and the world might face the worst economic crisis since the Great Depression of the 1930s. Besides, the United Nations Conference on Trade and Development projected that the global foreign direct investment (FDI) inflows in 2020-2021 may hit their lowest levels since the 2008-2009 financial crisis.

These forecasts demonstrate that the COVID-19 pandemic will result in inevitable severe impacts on global economy.

Countries around the world must join hands, in case the “black swan” turns into a “grey rhino” that threatens the development of world economy. Great perils bring to light the fraternity of strangers, said IMF Managing Director Kristalina Georgieva when giving a speech on the development of the world economy, quoting French novelist Victor Hugo. She encouraged the world to unite together, and jointly face the economic impacts from COVID-19 with courage and compassion.

To prevent the world economy from falling into recession, countries need to leverage and coordinate their macro policies to counteract the negative impact as the outbreak has disrupted production and demand across the globe, said Chinese President Xi Jinping at the virtual G20 summit on COVID-19.

He stressed that the world needs to implement strong and effective fiscal and monetary policies, better coordinate financial regulation, and jointly keep the global industrial and supply chains stable. Besides, it also needs to protect women, children, the elderly, people with disabilities and other vulnerable groups, and provide for people’s basic needs, he said.

China’s proposals sent a strong signal to stabilize the world economy, and injected confidence in global economic development.

The promises made by G20 leaders to stabilize global economy and finance, boost market confidence, guarantee employment and livelihood and reduce COVID-19’s impacts on global trade and supply chain demonstrated their resolution to offset the impacts and protect the stability of the world economy with stronger measures and more solidarity.

Synergetic macro policies will not only mitigate the impacts, but also improve the world’s capability to cope with shocks and turbulences. China, enhancing coordination on bilateral and multilateral levels to actively promote the implementation of the G20 consensus and call on G20 members and international society to play their roles in crisis response and global economic governance, has received positive response.

Members of international society should carry on the spirit of cooperation and do their best to reduce the damage of the pandemic on society and economy, recover global growth, stabilize the market and enhance economic resilience with all possible policy tools.

At present, China is amplifying its efforts to offer bulk drugs, daily necessities and pandemic prevention materials to the international society. It will keep implementing active fiscal policies and prudent monetary policies, steadfastly expand reform and opening up, relax restrictions on market access, continue improving business environment, and expand imports and foreign investment.

The exacerbating global spread of the novel coronavirus and the severe challenges faced by the world economy are making it more difficult for China to secure its economic performance, but with the giant size, strong resilience and enough policy tools, the country has the confidence to reduce the loss to the lowest and complete its yearly tasks for economic and social development.

As China achieves important progress in work resumption, it is also injecting stronger confidence in the international society. The world believes that China’s experience in resuming production has set an example for the world and the country’s economic recovery has brought the world hope.

By sending an obvious and positive signal of economic pickup and conducting positive interaction with the world, China is instilling positive energy in global economy.

The economic resilience of the world and global economic governance capabilities are facing severe tests – a critical moment that calls for precise targeting, solidarity and cooperation. Only by upholding multilateralism, enhancing macro policy coordination, jointly safeguarding the open world economy and gathering strength of common development, can the world economy withstand the tests and embrace a brighter future.