China sees only short-term virus impact on Southeast Asia economies

Chinese Ambassador to ASEAN Deng Xijun speaks at a news conference in Jakarta

JAKARTA (Reuters) - A senior Chinese diplomat on Friday sought to ease concerns about the economic impact on Southeast Asian countries from the coronavirus outbreak, including delays in infrastructure projects that are part of China's Belt and Road Initiative.

Policymakers in Southeast Asia, which has close trade and investment links with China, have been scrambling to mitigate the impact of the virus outbreak on their economies.

Some Belt and Road projects in the region are already delayed because Chinese workers have been unable to return after the Lunar New Year holidays, while a lockdown in parts of China has prevented imports from arriving.

Deng Xijun, China's ambassador to the Association of Southeast Asian Nations (ASEAN), said Beijing had taken measures to support enterprises involved in Belt and Road projects, including by helping companies prepare to resume their work overseas in an orderly way.

"China is the number one trading partner of ASEAN for the last 11 years and China is also the main source of tourists and investment .. so for sure it will have a negative impact with the economic and trade relations," Deng told reporters.

"However, I think this is temporary and short term," he said.

Deng, at the briefing in Jakarta, said some projects employed many local workers and some Chinese managers had gone "native" and did not return to China for the holidays.

His comments came a day after China called for solidarity in a hastily-arranged meeting to discuss the coronavirus outbreak with ASEAN members in Vientiane, Laos.

The virus outbreak has killed more than 2,200 people in mainland China and infected more than 75,400 others. To date, 25 other countries have reported more than 1,000 cases to the World Health Organization, with tallies in ASEAN members Singapore and Thailand among the highest.

Bank Indonesia on Thursday joined Thailand's and the Philippines' central banks in cutting interest rates to ward off the impact of the virus outbreak on their economies.

Bank Indonesia Governor Perry Warjiyo said as much as $400 million of potential investment by Chinese companies may be lost due to the virus outbreak. There could be a $300 million drop in Chinese exports and $700 million dip in imports, with GDP growth seen slowing slightly in the region's biggest economy, he said.

Singapore has cut its 2020 growth and exports forecast due to the impact of the coronavirus outbreak.

The epidemic is set to be a major focus of discussion at a weekend meeting of finance leaders from the Group of 20 major economies, according to Bank of Japan Governor Haruhiko Kuroda.


(This story corrects figure in paragraph 11 to $300 million)


(Reporting by Stanley Widianto; Writing by Gayatri Suroyo; Editing by Ed Davies and Jane Merriman)