USA: A senior economist predicted that in 2023, the Chinese economy will likely experience a general recovery and improvement that will significantly boost global economic growth.
According to Wang Yuanhong, deputy director of the State Information Center's Department of Economic Forecasting, the country's GDP is expected to grow by more than 5% annually in 2023. The foremost economic regulator in the nation, the National Development and Reform Commission, is connected to the centre.
The second-largest economy in the world will grow again, contributing significantly to the stabilisation of the global economy and the acceleration of the global economic recovery, according to Wang.
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Last year, China's economy made up about 18% of the global GDP. And between 2020 and 2021, China continued to contribute about 36% of the global economic growth.
According to a report on the achievement of major targets set by the 2022 Government Work Report, China's GDP exceeded 121 trillion yuan ($17.55 trillion) in 2022, posting a 3 percent year-over-year growth, despite economic shocks from international geopolitical tensions and COVID-19 outbreaks, Xinhua News Agency reported on Thursday.
China still has one of the fastest-growing economies, especially when compared to some other major economies, despite the fact that its 3 percent growth fell short of its predetermined annual growth target of about 5.5 percent.
China surpassed its annual target of 11 million new urban jobs in 2022, creating a total of 12.06 million. Additionally, the report showed that the country's consumer price index, a key indicator of inflation, increased by 2% year over year in 2022, far below the nation's annual inflation target of around 3%.
Foreign financial institutions have recently changed their stance towards the Chinese market, with Deutsche Bank increasing its estimate of this year's economic growth in China from 4.5 percent to 6 percent.
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Given weakening global demand conditions and a bleak global outlook, Wang said that while exports may be a drag on China's 2023 outlook, domestic demand including both consumption and investment will be key drivers propelling China's growth.
He predicted that significant growth of over 5% in China's retail sales this year due to the optimised COVID-19 control measures, the gradual normalisation of activities, the release of pent-up household spending, and a low comparison base the previous year. That will be significantly more than the drop in retail sales of 0.2 percent in 2022.
Wang stated that encouraging steady consumption growth is essential for bolstering and stabilising the expansion of the entire national economy.
He asserted that the nation would steadily increase employment and household incomes, particularly the take-home pay of low- and middle-income workers with high marginal propensities to consume. Only by maintaining stable payrolls can we guarantee an increase in purchasing power.
Additionally, more work will be put into enhancing the consumption environment, removing obstacles that might limit consumption, developing global consumption hub cities, lowering purchase restrictions to increase automotive consumption, and promoting offline, traditional, and new forms of consumption.
Particularly in the areas of new energy vehicles, housing, green home appliances, as well as services related to sports, education, healthcare, and elder care, Wang noted that the country will primarily focus on boosting the purchase of both goods and services.
Regarding worries that China's reopening may increase global inflation, Wang asserted that China will likely maintain inflation at a moderate and stable level in 2023 amidst a steady recovery of demand, which will instead contribute to a reduction in global inflation.
In 2023, he predicts that China's consumer price index will increase by 2%, remaining within a reasonable range.
Wang also foresaw pressure from a lack of domestic demand, challenges for small and medium-sized businesses, and a more challenging and depressing external environment.
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Wang said he anticipates the government stepping up fiscal and monetary policy support to promote growth, including tax and fee reductions, easing business burdens further, and boosting financial support for important sectors like technological innovation, new energy, and green development.