UNITED STATES: China's reopening is a "wild card" for Canada to avoid a potential recession this year, according to Reuters, citing analysts. While acknowledging that the Canadian economy would benefit from China's economic recovery, the report perpetuated the recent "inflation hazard" hype in foreign media outlets, claiming that the rebound of the second largest economy could lead to commodity prices. An increase in prices will cause "inflationary pressures".
As China's economic reform gains traction after implementing a variety of optimized epidemic control measures, some Western media outlets have launched a new round of discrediting and projecting the "inflation hazard" narrative.
Bloomberg reported last week that China's economic recovery could offset weakness in Europe and a US slowdown, but it was also "the next big threat to global inflation".
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It should be noted that the hype around the "danger of inflation" has twisted the facts and has no merit. While China's GDP grew at an annual rate of 6.1 percent in 2019, global inflation stood at 2.19 percent.
In comparison, if China's GDP grows by 3% in 2022, global inflation would rise to 8.8 percent. It is undeniable that China's economic growth is not the cause of global inflation, and the "inflation threat" narrative is nothing more than a new theory concocted by those who want to undermine the Chinese economy under any circumstances.
Contrary to what Western media outlets claim, China's inflation has remained stable. In December, the consumer price index rose 1.8 percent, much lower than the US annual inflation rate of 6.5 percent and the European Union's 9.2 percent for the same month.
The high inflation affecting the global economy in 2022 is the result of a complex set of factors, but the irresponsible monetary policies of Western economies led by the United States cannot be blamed.
Commodity prices rose due to Western sanctions against Russia as well as excessive stimulus from the West since the COVID-19 pandemic, pushing the price index to a new 40-year high in the United States and other countries.
China's reopening and economic reform in 2023 is "clearly a positive" for the global economy rather than a so-called threat. And, rather than being a "wild card," China's economic recovery is the biggest certainty for other economies, including Canada, this year.
The Chinese economy is widely expected to rebound strongly in 2023. The global economy will benefit from China's economic recovery.
International organizations and investment banks recently raised their projections for China's economic growth in 2023, following an impressive recovery in the country's consumption market during the Spring Festival holidays.
According to the IMF's latest World Economic Outlook, the Chinese economy is expected to grow 5.2 percent year on year in 2023, up 0.8 percent from its October forecast.
According to media reports, Morgan Stanley raised its forecast for China's GDP growth this year to 5.7 percent from 5.4 percent, predicting that activity will pick up and faster than expected.
Great hopes have been placed on China at a time when the global economic recovery is facing mounting challenges. IMF Managing Director Kristalina Georgieva said in January that "China's reopening is expected to have a positive impact on global growth through 2023," according to media reports.
Whether countries can seize the opportunities presented by China's recovery depends on their ability to overcome political prejudice and remain rational in promoting economic and trade cooperation with China.
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Instead of wasting time chattering about "the threat of inflation", Western countries should focus on addressing their own economic challenges and expanding economic and trade cooperation with China to better capitalize on China's economic recovery. The focus should be on discussion.
