I. The impact of the epidemic on the domestic economy

The impact of COVID-19 on China's economy is obvious. However, compared to the initial stage of the outbreak, the impact on China's economy has gradually weakened, which will not affect the long-term sound development of China's economy.

At present, in terms of specific domestic industries, the secondary industry and tertiary industry are greatly affected. Especially with the economic development in recent years, China's industrial structure adjustment, the tertiary industry in the proportion of the national economy increased, the employment population is also increasing. According to the National Bureau of Statistics, the total output value of the tertiary industry accounted for 53.92% of the total national economy in 2019, and the number of employed people reached 359.378 million (China Human Resources Development Report 2019). The tertiary industry bears the brunt of the epidemic, which has a great impact on China's national economy.

(Figure X: Proportion of added value of the three industries in GDP from 2015 to 2019 source: Statistical Bulletin of the People's Republic of China on National Economic and Social Development in 2019, website of the National Bureau of Statistics)

China's GDP fell by 6.8% year-on-year in the first quarter (NBS), setting the lowest growth rate since reform and opening-up. On April 14, the International Monetary Fund (IMF) predicted that China's economic growth in 2020 would be 1.2% (2020 IMF Spring Annual Meeting, Sina Finance). In March, China International Capital Corporation lowered its GDP growth forecast for 2020 from 6.1% to 2.6% (CICR), while some domestic research institutions expect growth around 3%.

(Figure: OECO economic growth forecast for 2020 (baseline scenario) source: OECD website)

Under the impact of the epidemic, the domestic economy suffered a great trauma in the first quarter, with tourism, entertainment, catering and transportation all greatly affected. However, as the epidemic prevention and control in China has been normalized since April 29, the import from abroad has been basically controlled, and the catering, transportation, tourism and other industries have gradually recovered. Only the entertainment industry, which was suspended by the press, is still in a difficult situation, but it has gradually begun to recover with the easing of the epidemic. In the offline entertainment industry, concerts, theater performances and movies are still suspended, but with the outbreak of "house economy" in the early stage of the epidemic, online video traffic has surged, and the popularity and broadcast volume of online dramas have also brought new opportunities to offline practitioners from another aspect.

In turn, a large part of people's demand for offline transactions has begun to be met online. Many offline supermarkets have cooperated with major e-commerce platforms to open the online business model. For example, the daily flow of King Rongyao on New Year's Eve was said to reach 2 billion (The money xiao Xin stored was also donated to Han Xin, angry o(￣┰￣*)ゞ).

The CNNIC report also said that the number of users of online education and online payment increased rapidly during the epidemic. Many industries, such as insurance, securities and medicine, have begun to speed up the transformation of the way they do business and move towards online digitization. The short-term impact of the epidemic has also been mitigated to some extent by the rapid development of the digital economy.

From a national perspective, the impact of the epidemic on the economy lies in the pace, not the trend.

Although the global economic growth declined in 2020 due to the impact of the epidemic, China also broke the conventional economic policies and helped individuals and enterprises to resume work and production from the supply side in the direction of rescue, and accelerated the optimization and reconstruction of social insurance structure by using fiscal policies. In fact, this is to take advantage of the epidemic to adjust the country's economy and create buffer and adaptive conditions for economic transformation from both short-term demand and supply shocks. In addition, China, as the country with the most complete manufacturing system in the world, has played its main advantage in the manufacturing of epidemic materials, thus alleviating the disjointed trend of "de-Sinification" in the global division of labor.

Ii. The impact of COVID-19 on the global economy

Due to the accelerated process of globalization, the space and time range is shrinking, the international population mobility is increasing, and the incubation period of infectious diseases is longer than the time of international population mobility... This increases the risk of the virus spreading on a large scale, and the risks to individuals are more complex and varied. This makes it impossible for any country to stay out of the epidemic. The only way to respond is for the world to take this seriously enough to work together to combat it.

At present, the epidemic is still in the stage of large-scale outbreak. IMF also predicts that the global economic growth may drop to -3% in 2020, and the global economy may enter a period of recession in 2020. As the vitality of the demand side decreases due to the difficult recovery of the supply side, the direct impact of the epidemic on the economy is bound to be negative. So countries around the world are fighting the epidemic and trying to recover their economies.

1. Post-epidemic changes and new opportunities

The impact of the epidemic on the global economy has turned economic transformation from forced to voluntary, which is both a crisis and an opportunity. Many new industries and opportunities have sprung up in response to the pandemic. What are the changes and opportunities brought about by the epidemic?

① Promote reform of the public health system

In the wake of the epidemic, the public's concept of public health and health care has also changed. People will pay more attention to personal health and hygiene, and the country will improve the prevention and control system of major epidemics and the national public health emergency management system. Recently, the return to society model of "Public Health 3.0" and the concept of "One Health" have been proposed internationally, aiming to achieve the overall Health of human beings, animals and the environment.

② To promote changes in consumers' lifestyles

In the long-term closed environment, consumers' diet structure, social mode and physical exercise mode have changed. For example, due to the inability to work in the field, online office software is promoted across the line. People gradually realize that this way is fast, low human resource consumption, safe and efficient. Therefore, a large number of enterprises still use online platforms for part of the work process after resuming work, which also promotes the improvement of the functions of online office software and the development of related industries. After the epidemic, people's online activities are no longer limited to shopping and entertainment. In turn, it also promotes the upgrading of consumer Internet to industrial Internet, thus speeding up the process of industrial digital transformation.

③ An accelerator for promoting economic reform

The Internet + industry has always been regarded as the inflection point of economic development, and intelligence and automation are also the goals pursued by the industry.

From the perspective of the market, the outbreak of the epidemic has accelerated the pace of reform, which had been slowly advancing with economic development. In particular, the transformation and development of industries such as Internet medical care and online education, which suddenly burst into market demand during the epidemic, have also been accelerated. A large number of online industries urgently need to optimize their own products and brands. Under the current situation of gradual loss of demographic dividend, the new consumption dividend driven by the Internet is more prominent due to the epidemic, and the reconstruction of digital social model is imperative. Although the epidemic will not completely change the market development model in the future, the combination of the Internet and the industry may have a qualitative leap in a short time.

The "community with a shared future for mankind" is first reflected in the economic aspect because of the epidemic. But the impact on the economy, both in China and around the world, will be temporary, and the pandemic may eventually serve as a springboard for economic transformation.

I. The impact of the epidemic on the domestic economy

The impact of COVID-19 on China's economy is obvious. However, compared to the initial stage of the outbreak, the impact on China's economy has gradually weakened, which will not affect the long-term sound development of China's economy.

At present, in terms of specific domestic industries, the secondary industry and tertiary industry are greatly affected. Especially with the economic development in recent years, China's industrial structure adjustment, the tertiary industry in the proportion of the national economy increased, the employment population is also increasing. According to the National Bureau of Statistics, the total output value of the tertiary industry accounted for 53.92% of the total national economy in 2019, and the number of employed people reached 359.378 million (China Human Resources Development Report 2019). The tertiary industry bears the brunt of the epidemic, which has a great impact on China's national economy.

(Figure X: Proportion of added value of the three industries in GDP from 2015 to 2019 source: Statistical Bulletin of the People's Republic of China on National Economic and Social Development in 2019, website of the National Bureau of Statistics)

China's GDP fell by 6.8% year-on-year in the first quarter (NBS), setting the lowest growth rate since reform and opening-up. On April 14, the International Monetary Fund (IMF) predicted that China's economic growth in 2020 would be 1.2% (2020 IMF Spring Annual Meeting, Sina Finance). In March, China International Capital Corporation lowered its GDP growth forecast for 2020 from 6.1% to 2.6% (CICR), while some domestic research institutions expect growth around 3%.

(Figure: OECO economic growth forecast for 2020 (baseline scenario) source: OECD website)

Under the impact of the epidemic, the domestic economy suffered a great trauma in the first quarter, with tourism, entertainment, catering and transportation all greatly affected. However, as the epidemic prevention and control in China has been normalized since April 29, the import from abroad has been basically controlled, and the catering, transportation, tourism and other industries have gradually recovered. Only the entertainment industry, which was suspended by the press, is still in a difficult situation, but it has gradually begun to recover with the easing of the epidemic. In the offline entertainment industry, concerts, theater performances and movies are still suspended, but with the outbreak of "house economy" in the early stage of the epidemic, online video traffic has surged, and the popularity and broadcast volume of online dramas have also brought new opportunities to offline practitioners from another aspect.

In turn, a large part of people's demand for offline transactions has begun to be met online. Many offline supermarkets have cooperated with major e-commerce platforms to open the online business model. For example, the daily flow of King Rongyao on New Year's Eve was said to reach 2 billion (The money xiao Xin stored was also donated to Han Xin, angry o(￣┰￣*)ゞ).

The CNNIC report also said that the number of users of online education and online payment increased rapidly during the epidemic. Many industries, such as insurance, securities and medicine, have begun to speed up the transformation of the way they do business and move towards online digitization. The short-term impact of the epidemic has also been mitigated to some extent by the rapid development of the digital economy.

From a national perspective, the impact of the epidemic on the economy lies in the pace, not the trend.

Although the global economic growth declined in 2020 due to the impact of the epidemic, China also broke the conventional economic policies and helped individuals and enterprises to resume work and production from the supply side in the direction of rescue, and accelerated the optimization and reconstruction of social insurance structure by using fiscal policies. In fact, this is to take advantage of the epidemic to adjust the country's economy and create buffer and adaptive conditions for economic transformation from both short-term demand and supply shocks. In addition, China, as the country with the most complete manufacturing system in the world, has played its main advantage in the manufacturing of epidemic materials, thus alleviating the disjointed trend of "de-Sinification" in the global division of labor.

Ii. The impact of COVID-19 on the global economy

Due to the accelerated process of globalization, the space and time range is shrinking, the international population mobility is increasing, and the incubation period of infectious diseases is longer than the time of international population mobility... This increases the risk of the virus spreading on a large scale, and the risks to individuals are more complex and varied. This makes it impossible for any country to stay out of the epidemic. The only way to respond is for the world to take this seriously enough to work together to combat it.

At present, the epidemic is still in the stage of large-scale outbreak. IMF also predicts that the global economic growth may drop to -3% in 2020, and the global economy may enter a period of recession in 2020. As the vitality of the demand side decreases due to the difficult recovery of the supply side, the direct impact of the epidemic on the economy is bound to be negative. So countries around the world are fighting the epidemic and trying to recover their economies.

1. Post-epidemic changes and new opportunities

The impact of the epidemic on the global economy has turned economic transformation from forced to voluntary, which is both a crisis and an opportunity. Many new industries and opportunities have sprung up in response to the pandemic. What are the changes and opportunities brought about by the epidemic?

① Promote reform of the public health system

In the wake of the epidemic, the public's concept of public health and health care has also changed. People will pay more attention to personal health and hygiene, and the country will improve the prevention and control system of major epidemics and the national public health emergency management system. Recently, the return to society model of "Public Health 3.0" and the concept of "One Health" have been proposed internationally, aiming to achieve the overall Health of human beings, animals and the environment.

② To promote changes in consumers' lifestyles

In the long-term closed environment, consumers' diet structure, social mode and physical exercise mode have changed. For example, due to the inability to work in the field, online office software is promoted across the line. People gradually realize that this way is fast, low human resource consumption, safe and efficient. Therefore, a large number of enterprises still use online platforms for part of the work process after resuming work, which also promotes the improvement of the functions of online office software and the development of related industries. After the epidemic, people's online activities are no longer limited to shopping and entertainment. In turn, it also promotes the upgrading of consumer Internet to industrial Internet, thus speeding up the process of industrial digital transformation.

③ An accelerator for promoting economic reform

The Internet + industry has always been regarded as the inflection point of economic development, and intelligence and automation are also the goals pursued by the industry.

From the perspective of the market, the outbreak of the epidemic has accelerated the pace of reform, which had been slowly advancing with economic development. In particular, the transformation and development of industries such as Internet medical care and online education, which suddenly burst into market demand during the epidemic, have also been accelerated. A large number of online industries urgently need to optimize their own products and brands. Under the current situation of gradual loss of demographic dividend, the new consumption dividend driven by the Internet is more prominent due to the epidemic, and the reconstruction of digital social model is imperative. Although the epidemic will not completely change the market development model in the future, the combination of the Internet and the industry may have a qualitative leap in a short time.

The "community with a shared future for mankind" is first reflected in the economic aspect because of the epidemic. But the impact on the economy, both in China and around the world, will be temporary, and the pandemic may eventually serve as a springboard for economic transformation.