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Global Health Econ Sustain An analysis of national economic resilience

Q4 2019 to 2.45% in Q1 2020. This uptick can be attributed
to their primary clientele – small and microenterprises,
which were disproportionately affected by the epidemic.
Conversely, the other three bank types, typically averse
to lending to higher-risk small and micro enterprises,
maintained higher asset quality and were less affected by
the epidemic. However, as the epidemic became gradually
controlled and the businesses resumed normal operations,
the NPL rate began to decrease, stabilizing after Q3 2020.
5.3.3. Financial markets Figure 15. The non-performing loan ratio of commercial banks
The stock market in China suffered a huge impact after the
outbreak of the epidemic but recovered rapidly (Figure 16).
From January to March 2020, the huge uncertainty
brought by the epidemic caused panic among investors,
causing the closing price of the Shanghai composite index
to dip from 2976 Yuan to 2750 Yuan. With the effective
control of the epidemic and the implementation of loose
monetary policy, a large amount of funds were poured into
the stock market to stimulate a quick rebound. After the
fourth quarter of 2020, the stock market fluctuated slightly
due to the tightening of monetary policy and the regional
epidemic in Northeast China.
Figure 16. Closing price of shanghai composite index
The COVID-19 epidemic also affected the bond market
(Figure 17). In this epidemic, almost all companies were
made to confront great uncertainty and risks, which
caused an increase in the issuance of corporate credit
bonds by more than 50% from January to March 2020. The
issuance of treasury bonds increased more than 15 times
from 45.79 billion Yuan to 785.06 billion Yuan, since the
central government had to greatly expanded its fiscal funds
to support local governments in controlling the epidemic.
After the outbreak of the epidemic, the issuance of local
government bonds experienced a first reduction and then
a sharp expansion. During the epidemic, taxes decreased,
but government spending increased significantly,
especially on medical and public health. Therefore, on Figure 17. Bond market in China
achieving epidemic control, the central government
and local governments needed to issue a large number
of bonds to maintain the government’s operation. In the
second half of 2020, the issuance of treasury bonds and
local government bonds decreased significantly due to the
gradual recovery of the economy and the increase of fiscal
revenue. However, the issuance of local government bonds
showed a fluctuating upward trend after December 2020,
because there were still small-scale outbreaks in some
regions, which required local governments to bear the
corresponding expenditures. Figure 18. Closing price of US dollar against Chinese Yuan
The epidemic also slightly strengthened the Chinese
Yuan against the US dollar (Figure 18). After the outbreak the Chinese Yuan rose from 6.91 in January 2020 to 7.14 in
of the epidemic, the exchange rate of the US dollar against May 2020, and then fell to 6.43 in January 2021. Exchange

Volume 2 Issue 2 (2024) 12 https://doi.org/10.36922/ghes.1842