China’s Xi Jinping Warned Officers That Efforts To Cease Virus May Harm Economic system: Report

Xi Jinping said that some of the steps were impractical and caused public fear.

BEIJING:

Chinese President Xi Jinping last week warned top officials that efforts to curb the new corona virus had gone too far and threatened the country's economy, sources told Reuters a few days before Beijing took steps to mitigate the setback.

With the slowest growth in nearly three decades, China's leadership appears to be striving to strike a balance between protecting an already slowing economy and eradicating an epidemic that has killed more than 1,000 people and infected more than 40,000.

After examining reports of the outbreak of the National Development and Reform Commission (NDRC) and other economic departments, Xi Jinping reported at a meeting of the Politburo Standing Committee on February 3 that some of the measures taken to curb the virus hit the economy said two people familiar with the meeting, who refused to be named because of the sensitivity of the matter.

He asked them to refrain from "more restrictive measures", the two said.

Local authorities outside of Wuhan – where the virus is believed to have first appeared – have closed schools and factories, closed roads and railroads, banned public events, and even closed residential buildings. Xi Jinping said some of these steps were impractical and publicly frightened, they said.

The Chinese State Council's information office did not immediately respond to requests for comments.

The official Xinhua news agency, which reported on the Politburo meeting last Monday, described the outbreak of the corona virus as "an important test for China's system and its ability to govern." He added without details that "party committees and governments at all levels have been asked to achieve the goals of economic and social development this year."

Since the meeting, the Chinese central bank has vowed to increase support for the economy and prepare policy tools to compensate for the damage. The NDRC announced at a weekend meeting that it was asking companies and factories to resume work, particularly in "key industries" such as food and pharmaceuticals.

"Given the epidemic and downward pressure on the economy, it is more important to maintain economic growth," said Pan Gongsheng, vice-governor of the Chinese central bank on Friday.

On Monday, Zhejiang Province, an economic power plant in eastern China, ordered local authorities not to overreact by restricting daily movement or "chain stores and convenience stores that sell daily needs like vegetables, cooking oil, and meat and eggs." , closed and dairy products, "said a government publication.

China has introduced a new tax policy to reduce the burden on industries severely affected by the epidemic.

Reuters reported this month that policy makers in China are preparing measures, including more government spending and interest rate cuts, as the outbreak will wreak havoc on first-quarter growth.

Many in China returned to work on Monday after the moon's New Year holidays were effectively extended by about 10 days, but morning commuters were far less crowded than usual and numerous factories remained closed.

The ruling Communist Party's propaganda department last week ordered the state media to focus on the "economic boom", a person with direct knowledge of the order who refused to be named because of the sensitivity of the situation.

China's official media has tried to project calm. In an editorial on Monday, the official Volkszeitung urged the public to treat the epidemic with a "positive mood".

(Except for the headline, this story was not edited by NDTV staff and comes from a syndicated feed.)