(Yicai Global) April 19 -- China’s top economic planning agency has said that the resurgence of Covid-19 in the country will have only a temporary impact on domestic demand.

China’s economic development is so resilient that the fundamentals for long-term growth have not changed, Meng Wei, a spokeswoman for the National Development and Reform Commission, said today.

The economy will recover with the contagion’s effective control and as policy measures feed through, she pointed out. Shenzhen and other Chinese cities that were struck by Covid-19 outbreaks earlier this year have slowly returned to normal, and consumption and investment are picking up gradually.

China’s central bank yesterday unveiled 23 measures to further support industries, companies and people affected by the recent Covid-19 resurgence after it moved at the end of last week to cut the reserve requirement ratio for banks from April 25, effectively freeing up about CNY530 billion (USD83 billion) of long-term liquidity.

The NDRC will work with relevant parties to enhance the implementation of macro policies, boost policy coordination, and focus on stabilizing the economy, Meng noted.

In terms of consumption, the focus is on promoting the roll-out of policy documents that further release consumption potential and promote its sustained recovery, she said. The central government will encourage more consumption in key areas and continue to support the purchase of new energy vehicles.

It also will explore the consumption potential of regions at the county-level and below, and guide commercial businesses, traders and e-commerce platforms to expand into rural areas.

More Support

As for helping firms out of difficulties, it is necessary to implement support measures for hard-pressed industries such as catering, retail, tourism, and transport, and increase support for the real economy and small- and medium-sized enterprises as well as micro businesses in a targeted manner, Meng stated.

Specific actions aimed at preventing and resolving arrears at SMEs will continue. In addition, on the basis of the precise implementation of Covid-19 restrictions, every effort will be made to ensure the normal operation of logistics, she said.

Moreover, the government will strictly safeguard the bottom line of people’s livelihoods, Meng said. Employment priority policies will be implemented as large-scale vocational skills training is still being conducted. The government will work to strengthen supplies and stabilize prices of key basic necessities so as to guarantee the livelihood of people in need.

Recently, international commodity  prices have climbed significantly due to geopolitical factors, according to Meng. This will bring about imported effects and increase the upward pressure on China's producer prices, she said.

Meng pointed out that the producer price index rose 8.3 percent last month from a year earlier, slowing for a fifth consecutive month. That trend will continue during the year as measures to guaranteeing supplies and stabilize prices take effect, along with a high base.

Editor: Peter Thomas