BEIJING, April 27 (Xinhua) -- China, which logged its first quarterly economic contraction in nearly 30 years, has paid a "necessary price" to contain the spread of COVID-19, but its sound economic fundamentals remain unchanged, a senior statistician said.

"The COVID-19 epidemic had an unprecedented impact on China's economic and social development, and some economic costs incurred proved to be necessary," said Sheng Laiyun, deputy head of the National Bureau of Statistics, in an exclusive interview with Xinhua. "Otherwise, the economy and society would suffer greater losses."

When the outbreak of COVID-19 brought the Chinese economy to a temporary standstill, the Communist Party of China (CPC) Central Committee has always put people's lives and health in the first place, taken strong measures to fight the epidemic, basically contained the spread of coronavirus in China within a relatively short period of time, and sustained positive momentum of epidemic prevention and control, he said.

Sheng said the 6.8-percent dive in Q1 gross domestic product should be seen objectively, as the fallout of the novel coronavirus, though unprecedented, did not "hurt the sinews or fracture the bones" of Chinese economy.

"The epidemic did not shake to the core of China's economy, whose fundamentals for long-term sound economic development emerged unchanged," he said.

"The industrial system built over the years is complete, the infrastructure is in good shape, and the advantages of a super-large market remain obvious," Sheng said. "In particular, the trend of economic transformation and upgrading has been established, and new growth drivers have become stronger against the impact of the epidemic."

As an example of the new engines, online retail sales of commodities totaled more than 1.85 trillion yuan (about 261.8 billion U.S. dollars) in Q1, up 5.9 percent year on year, accounting for 23.6 percent of the total retail sales of consumer goods.

A resilient Chinese economy is seeing businesses and society fast returning to normalcy, with the CPC Central Committee strengthening counter-cyclical adjustment of macro policies and introducing a raft of pro-recovery policies such as tax and fee cuts and other financial boosts, Sheng said.

The latest data showed about 95 percent of service outsourcing enterprises had resumed work as of mid-April, while China's air passenger numbers have recovered to nearly one-third of the level seen in the same period last year as the local epidemic wanes.

China's domestic activity is expected to rebound and continue to recover in the second half of this year as the containment measures are withdrawn and policy support gains strength, Kenneth Kang, deputy director of Asia and Pacific Department at the International Monetary Fund (IMF), told Xinhua in a recent written interview.

China is one of the few major economies that could see economic expansion this year, according to the IMF's recently released World Economic Outlook report, which projected global economy to decline by 3 percent in 2020.

PREPARE FOR WORST-CASE SCENARIOS

Sheng said challenges still remain for the Chinese economy, as the fallout of novel coronavirus is worse than that brought by the 2003 SARS epidemic and the 2008 global financial meltdown for its extensity, depth and duration.

"While the domestic progress in coronavirus prevention and control gets further consolidated, the pandemic's colossal impact on the global economy is still developing and evolving," he said. "The secondary wave of COVID-19 impact is expanding its reaches, which brings new challenges to China's economic development, and we must be sober about the situation."

China will gear up macro policy countermeasures to mitigate downward economic pressure and unprecedented external impact as maintaining overall economic and social stability is the top priority under the current situation, with stabilizing the economic fundamentals as the primary task, Sheng said, noting that China aims to enhance synergy of policies and expand effective demand.

A meeting of the CPC Central Committee on April 17 called for more proactive fiscal measures such as issuing special government bonds to support the virus fight and increasing the issuance of local government bonds as well as raising the utilization efficiency of capital to help stabilize the economy.

Monetary policies should be more flexible and balanced and instruments such as reserve requirement ratio cuts, interest rate reductions and reloans should be fully leveraged to ensure reasonable and sufficient liquidity and a lower interest rate in the loan market.

"Given the complex situation, we need to firm up confidence and be aware that the pandemic will not rattle the solid foundation and trend of China's stable economic development in the long term," Sheng said. "With that said, we also need to think about the worst-case scenarios, fully assess difficulties, risks and uncertainties, adopt stronger macro policies to mitigate the pandemic's impact and prevent the temporary shock from escalating into a shift in trend."