[Deputy Manager Column] Another Crisis of 'R (Resilience)'

[Image source=Yonhap News]

"China is becoming much more stable. It seems they are very focused on preventing a resurgence of COVID-19 from external sources, stabilizing the capital Beijing, and resuming factory operations and production."

This was the response when I asked a top executive of a major corporation operating in China in early March, when the COVID-19 situation was notably calming down there. At that time, South Korea was experiencing over 500 new confirmed cases daily. Three weeks later, I sent a Weixin (WeChat) message again to inquire whether the local factories were running smoothly, and surprisingly, the reply was that the Chinese government was actively supporting the resumption of production, which had actually improved operating conditions, but on the other hand, it was a cause for concern.

China is recovering from COVID-19 at an alarmingly rapid pace, while the United States, which had been keeping watch, is only now beginning its fight against the infectious disease, and Europe has no measures at all, meaning China's economic influence in the world could grow even larger. Although the controversy over the origin of the initial COVID-19 outbreak is ongoing, we are witnessing the ironic situation where "China caused the problem first, triggered the pandemic, and is now returning alone to normal daily life." This means we should not lightly overlook China's 'resilience' in overcoming negative situations and regaining its original stable state.

In fact, 'resilience' refers to the power to return to one's original state and is a psychological term meaning the positive strength to overcome adversity or hardship. In South Korea, Professor Kim Juhwan of Yonsei University first introduced the concept and developed a resilience index to measure its degree.

China's resilience index is soaring vertically toward a perfect score. It is the only country in the world where factories are operating normally, and in the case of Hyundai Motor, over 90% of dealers have resumed business. While China escaped the real economy crisis during the 2008 global financial crisis through a strong fiscal policy centered on social overhead capital (SOC) worth 4 trillion yuan (about 692 trillion won), what is noteworthy in the current COVID-19 situation is that fiscal spending is concentrated on fourth industrial revolution-related fields such as 5G.

Under the pretext of economic stimulus, package support measures that cross the line of unfair trade practices, such as extending subsidies for new energy vehicles until 2022, are being announced daily. We must not overlook another 'R (Resilience)' crisis following the recession.

Kim Hyewon, Deputy Director, Ministry of Trade, Industry and Energy