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What kind of impact does the new crown virus pneumonia epidemic have on different industries in China?

On February 20th, the China Wealth Management 50 Forum (CWM50) organized industry experts to hold a web video conference on "Macro Talk: Economic Prospects and Capital Market Prospects in the Current Situation".

Six chief economists from enterprises and institutions including Ren Zeping, the chief economist of Evergrande Group, Shen Jianguang, the chief economist of Jingdong Mathematics, and Zhu Baoliang, the chief economist of the National Information Center were invited to participate in the meeting to discuss and analyze the impact of the epidemic. Generally speaking, the impact of this epidemic on China's industry is divided, and the employment problem behind the plight of SMEs needs to be taken seriously.

Industry impact differentiation

Ren Zeping, chief economist of Evergrande Group, said that from the perspective of the industry, the aggregate service industry has suffered a large loss. In trillions, the employment situation is grim. He pointed out that agglomeration industries, such as tourism, catering, hotels, transportation, and real estate, have been more affected. From a rough estimate, these severely affected industries accounted for 30% of GDP and employment. Of course, there are also industries that benefit, such as medicine, online entertainment, and online office, but the proportion is relatively low overall. It can also be seen from simple calculations, such as movies, catering, and delivery. According to available data, these three industries lost 1 trillion yuan in 7 days.

Shen Jianguang, chief economist at JD.com, believes that from the perspective of online retail, compared with traditional industries, e-commerce is relatively less affected by the new crown pneumonia epidemic, and demand for emerging technologies such as robots and smart cities has risen significantly. For the e-commerce industry, the biggest obstacles are road blockages, city closures, road closures and other measures, which have an impact on staff arrival and logistics distribution, but online sales are still good.

Industrial Political Bank chief economist Lu Political Commissioner believes that in the context of oversupply, the demand gap caused by the epidemic is smaller than expected. At the same time, due to the relatively popular Internet economy in China, many demands have been transferred to online realization and new creation. Therefore, the impact of the epidemic on the economy is more optimistic than expected. For example, the creation and transfer of consumption may be able to hedge some over-pessimistic expectations. In terms of consumer creation, such as the creation of GDP of delivery personnel between online ordering of fresh food and express delivery, there are also remote office and cloud services. In terms of consumption transfer, such as moving from movie theater consumption to online games.

The Political Commissar of Lu said that some of the newly created GDP and changes due to the epidemic may be structural changes in the medium and long term in the future. After the change, a considerable part will become continuous demand and will not change back.

Zhu Baoliang, chief economist of the National Information Center, said that China ’s new employment mainly comes from the service industry. This time, the main impact is on some labor-intensive service industries such as catering, entertainment, culture, housekeeping, and transportation, so the employment pressure is very high. It is mainly the employment pressure of migrant workers.

Behind the plight of SMEs

At this forum, Xue Hongli, general manager of Pudong Development Bank's financial market department, said that from the commercial bank credit data in mid-February, the outbreak affected the individual industrial and commercial households and small and micro enterprises, and exacerbated the reshuffle of SMEs. Bring greater employment pressure.

The Political Commissar of Lu pointed out that the epidemic has actually accelerated the process of destocking, de-capacity, deleveraging, and survival of the fittest. Of course, while companies may be eliminated more quickly, we must face the risk of excessive unemployment. Regarding how to help enterprises stabilize their jobs, he said that the most important factor that many companies consider to be the most difficult is the salary of employees. He suggested that for enterprises that do not dismiss their employees, the government subsidizes and assumes the basic salary of employees.

JP Morgan China Chief Economist Zhu Haibin analyzed that the employment problem has not begun to be exposed, but as the deep-seated impact of the epidemic gradually emerges and is transmitted, some SMEs may be affected even more. From a macro perspective, employment pressure may increase significantly in the future. He suggested that forward-looking preparations must be made in policies, such as job creation, consumer subsidies for low- and middle-income groups, and unemployment protection.

Regarding the rescue and employment of small and medium-sized enterprises, Zhu Baoliang suggested that the first is to focus the policy on solving short-term difficulties and employment of enterprises. Fiscal efforts should be strengthened, the deficit rate can be increased to 3.5%, and the issuance of special bonds for local governments should be increased. Second, monetary policy should pay attention to prices, and there is no problem in increasing liquidity in the short term. After the epidemic eases, it should return to normal. The third is to support the social policy, to protect employment and the unemployed, and to subsidize groups such as school students and the poor who are more affected by prices. This is also a requirement for a comprehensively well-off society and accurate poverty alleviation