Author: Yu Nanping

(Decision-making Consultation Base, Shanghai Municipal People’s Government/Chief Expert, Yu Nanping Studio, Professor of East China Normal University)

The COVID-19 epidemic will have a great impact on the global economy and society. The ongoing epidemic has disrupted the structure of the global supply chain, and also caused extremely weak demand both in China and across the world, leading to reduced income, worsened consumer confidence, and short-term employment challenges. The economic problems arising from the epidemic are unconventional, and, therefore, unconventional measures can be taken in response.

Judging from the current global situation, it is difficult for traditional monetary policies to play a greater role in solving economic problems caused by the epidemic, because no matter how much money the government issues, companies will not expand production without sales revenue. Therefore, local governments can adopt precise fiscal policies on a city-by-city basis, and drive enterprises to jointly unveil consumption stimulus measures to provide structural support to key emerging consumer sectors such as information consumption and new-energy vehicles. Local fiscal policies should also achieve the maximum effect in stimulating consumption and promoting transformation of the economic structure.