Question

1. Due to current economic turmoil created by the Corona virus pandemic, China's economy is expected to grow by 1.2 percent this year, down from 6pc growth, on weak exports and losses in domestic activity due to social distancing steps, according to International Monetary Fund's (IMF) January forecast. The world's second-largest economy is expected to see a rebound in activity later this year, with growth to bounce back to 9.2pc next year, the IMF said. There were risks even to China's growth outlook as the virus could return and delay normalisation. Chinese policymakers have reacted very strongly to the outbreak of the crisis. If the situation becomes aggravated, they have more room to use fiscal, monetary policies. Weather that would be needed, will really depend on progress in containing the virus. Instruction: Please make sure that each answer is having 150 - 175 words (3 x 5Marks = 15 Marks) Questions 1. These days, economic crisis is a global issue. Majority of countries are unable to increase their exports. According to you what china should do to overcome the economic crisis 2. What is the role of small and medium enterprises in this current situation, and how can SME's help to increase the GDP of their economy? 3. What suggestions can be given in the situation which may reduce scarcity of resources worldwide.

Answer 1

Answer 1:

A. Strengthening political and socio relationships:

China should take confidence of the world leaders and get into bilateral talks with world leaders. They should give the world leaders a real reasons and the actual findings and route cause on pandemic to rebuild relationships. China need to rebuild relationship with the cross border economies.

B. Changed and new philosophy:

China should also change the philosophy of thinking and promote other economies who have got effected due to this pandemic. For example, USA, Europe and South Asian Countries.

C. Changing export policies and removing decentralization:

China should amend its export and import policies make them flexible for other countries. And, remove decentralization of powers and decision making.

Answer 2:

Small and Medium Enterprises employ major human resources of the country which includes skilled and non-skilled category employees and workers.

Role of Small and Medium Enterprises in this pandemic situation:

· Job creation: Small and Medium Enterprises creates new jobs for the people, people earn from SME’s which increases their purchasing power and then buy things and make purchases in the market.

· Escalating the GDP of the economy: Small and Medium Enterprises escalate the GDP of the economy by earning profits and circulation flow of money in the other sectors of the economy of the country.

· Producing essential commodities: Small and Medium Enterprises produce good and commodities which includes essential category products under this pandemic situation.

· Regulating export in the china market: Small and Medium Enterprises regulate export and import in the market of china.

Small and Medium Enterprises can help to increase the GDP of their economy:

Small and Medium Enterprises do various kind of businesses which gives employment to the skilled and non-skilled workers and employees. Small and Medium Enterprises generate revenue, pay taxes to the government and further escalates flow of money in the market.

Therefore, Small and Medium Enterprises need to be provided extra fiscal or monetary support from the government of the country for survival in these crisis. For example, interest free loans, no insolvency filing for next one year etc.

Answer 3:

Coronavirus (Covid-19) will not be removed from the world till a strong vaccination is made for it. Therefore, till then there are several measures the governments should take to control the situation in their respective countries.

Suggestions to be given in the pandemic situation which may reduce scarcity of resources worldwide:

A. People should be provided health and safety control measures and related facilities at work place under pandemic. So that, the people can work and produce goods and services getting the economy back to normal and reducing the scarcity of resources.

B. Lifesaving resources for people should be generated by the government, for example, hospitals, ventilators, kits, gloves, masks etc.

C. Control mechanism for workers so that people can work at their work places and contribute to their economy. With these measures economy will get back to normal and resources will not get scarce.

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