IMF Director of Asia and Pacific, Changyong Rhee, said that if coronavirus slows the Chinese economy, the government has “policy room” for stimulus. Nevertheless, he insisted that China should continue with “structural reform and credit control”. He added that “(We) don’t want to deny this event definitely increases the downside risk. Especially the downside risk will be large for countries which have close ties with China. At this moment, I think a major channel that has an impact in Asia is tourism”.
In China, Cai Fang, the vice head of the Chinese Academy of Social Sciences (CASS), said “although the temporary impact caused by the epidemic will slightly reduce the growth rate and other development indicators, it will not delay the fulfillment of the goal of building a moderately prosperous society.” He added that the government should use policy tools in a timely and flexible way and adopt “unconventional policy tools”, to support the economy.
