With COVID-19 seemingly under control around the country, China remains cautious but confident that things are returning to the pre-epidemic normal. But, while the imminent threat to human health has subsided, the country is faced with task of dealing with the economic impact of the virus. The service sector has been hardest hit by the pandemic, as remaining epidemic control regulations combined with lingering reservations about public places have severely hampered offline consumption.
Yao Yang, Executive Dean of the Institute of South-South Cooperation and Development at Peking University, offered his opinion on how to tackle these issues.
Yao Yang is the Executive Dean of the Institute of South-South Cooperation and Development at Peking University, the Dean of the National School of Development at Peking University, Editor-in-Chief of China Economic Quarterly, lecturing professor and Ph.D. supervisor. He has won numerous awards in his field, including the Award of Sun Yefang Economic Science and the Pushan Award for International Economics.
Firstly, according to Yao, we need more accessible, scientific pandemic prevention information to calm panic over a potential second wave. Secondly, we need to relax requirements on businesses and create more flexible measures that allow proper prevention without shutting down everything.
"The most urgent thing for China to do is to boost consumption. The government could hand out cash and vouchers," began Yao when speaking of the third step.
"For low-income people, I suggest giving them cash directly, and consumer vouchers could go to the middle class. Whether to give money to low-income groups is not a money issue, it's about shifting conception. Some local governments have wasted investments in infrastructure projects, and it's better to give the money directly to the people."
Similar measures are already underway in countries around the world. Many countries around Europe have greatly expanded unemployment benefits for workers affected by COVID-19, the US has issued a one-time relief subsidy of $1200 USD, and other countries like Canada have established relief systems that offer unemployed people a regular income while lockdown policies remain in effect. As most of the world is still a long way from containing the disease, we have yet to see which policies will prove effective in mitigating the economic impacts of the disease, but China is in a unique position to serve as a leader and model for post-COVID recovery.