GDP | Global Development Perspective
Policy Brief No. 20.002
Feb.11, 2020
Efforts needed for minimizing serious shock to production
Qiyuan Xu
Measures should be taken in advance to reduce the impact of coronavirus
outbreak on manufacturers.
The fight against the novel coronavirus remains the top priority for the country
at the moment. Nevertheless, how to restore production after the battle is won
and minimize the impacts on the economy should not be neglected.
……
Second, fixed expenses and other difficulties put pressure on the capital chains
of enterprises.
During the downtime caused by the delayed return to work and quarantining of
employees, enterprises still have to pay fixed expenditures such as rent and
interest. Moreover, some enterprises need to pay employees' wages during the
downtime. As a result, many private companies are struggling under the
financial strain. Coupled with the extra costs incurred by the protective
measures taken against the virus, these enterprises will suffer a big shock from
the outbreak.
To mitigate the shock caused by the epidemic on production, it is suggested
that the following measures be taken.
……