China expected to boost world economic recovery in 2023

This aerial photo taken on Jan 26, 2022 shows a cargo vessel at Rizhao Port in Rizhao, East China's Shandong province. [Photo/Xinhua]

Given the resilience and potentials of its economy, analysts believe China will continue to be a reliable and important driving force of global economic growth in 2023. This year, in the face of multiple challenges, China has maintained the overall stability of its economy by effectively coordinating COVID-19 policy with economic and social development, and introducing a series of stimulus packages to support enterprises, stabilize consumer prices, and boost the confidence of global investors. The annual Central Economic Work Conference held in Beijing from Thursday to Friday noted that China's economic performance in 2023 is expected to witness an overall recovery and improvement.

Outlook of fast growth

Elaborating on the fiscal and monetary, industrial, science and technology, and social policies for 2023, the Central Economic Work Conference put economic stability a top priority and demanded pursuing steady progress while ensuring economic stability for the next year. China has also pledged to further expand domestic demand and to give full play to the fundamental role of consumption and the key role of investment in 2023, according to a meeting convened by the Political Bureau of the Communist Party of China Central Committee earlier this month.

Considering the fact that Beijing has many policy levers at its disposal to secure a resilient recovery, observers predict the Chinese economy will have a good performance in 2023. International Monetary Fund Managing Director Kristalina Georgieva said that China has fiscal space to boost its economy and counter the downward pressure. "We see three to four quarters of strong growth, starting either in 2Q or 3Q of next year," wrote analysts at multinational financial services company Societe Generale, forecasting the Chinese economy could achieve around 5 percent growth in 2023.

In a recent report, Morgan Stanley also predicted China would stage a comeback from mid-2023, achieving a full-year growth of 5 percent. The analysts' optimism is built on multiple positive signs and indicators. "Chinese equities have risen 37 percent since the start of November following multiple positive reopening signals from Beijing," read a research note by UBS strategists Christopher Swann and Vincent Heaney on Monday. Meanwhile, a host of multinationals are expanding their operation and investment in China. In the first 10 months, foreign direct investment in the Chinese mainland in actual use went up 17.4 percent year-on-year to $168.34 billion, official data showed.

Among the heavyweight investors is German automaker Volkswagen, which announced investments of up to $3 billion in two new R&D-focused joint ventures in China in the second half of 2022 alone. "The largest firms that have sunk billions of dollars into local assets are staying put and following through on their investment plans," Rhodium Group said in a report published Tuesday, indicating investors' confidence in China's market outlook.

COVID strategy optimized

With medical systems fortified, new variants getting tamer and 90 percent of the population armed with vaccines, China recently announced new measures to optimize its epidemic control as it's latest efforts to contain the shocks of the pathogen on society and economy, after the country has managed to save as many lives as possible and achieve notable economic growth. Since the onset of the pandemic, China has kept both the COVID infection rate and the fatality rate way lower than figures of other major countries.

China's COVID control strategy makes it a "global role model of fighting the COVID pandemic," Wolfram Elsner, a professor of economics at the University of Bremen in Germany, told Xinhua. While containing the virus during the pandemic, China has done well in minimizing economic losses and protecting people's livelihoods. The country achieved GDP growth of 2.3 percent and 8.1 percent in 2020 and 2021, respectively. The recovery of China's economy resulted from a swift resumption of Chinese industries thanks to the country's policy package to stabilize the economy and its effective COVID-19 control policy, said Thong Mengdavid, a research fellow at the Phnom Penh-based Asian Vision Institute.

Noting the recent measures to ease COVID-19 restrictions, Liang Guoyong, a senior economist with the UN Conference on Trade and Development, observed that although the change will inevitably bring about some pains in the short term, the adjustment is beneficial for the revitalization of economic activities and business confidence, pushing the economy back on a healthy growth track. Looking forward to 2023, China's economy is expected to show a strong recovery, with growth momentum considerably strengthened, Liang said. "This will provide an important impetus for the growth of world economy and contribute to its overall stability."

Major engine for global growth

As the world's second largest consumer market, second largest source of foreign investment and a major trading partner of over 130 countries and regions, China stays committed to promoting high-level opening up and accelerating efforts to foster a new development paradigm. Through multilateral mechanisms such as the Belt and Road Initiative and the Regional Comprehensive Economic Partnership, China has become even more closely bonded with its global and regional partners, many of which pin their hopes on a robust recovery of the Chinese economy to inject strong momentum into the world in the near future.

"China is one of the most important economic partners, business partners for all countries and businesses," Jan Knoerich, a senior lecturer in the economy of China at King's College London, told Xinhua. "What it does and how its economy is doing does have an impact on the global economy and influences the global economy." "With such a big economy of scale, China is playing its role and turning out to be a land of opportunities of the East," said Badiea Shaukat, an economic consultant at Sustainable Development Policy Institute, an Islamabad-based think tank.

In the first 11 months, China's trade in goods expanded 8.6 percent year-on-year to 38.34 trillion yuan ($5.5 trillion), with the Association of Southeast Asian Nations being its largest trading partner, official data showed. The growth "proves that China has opened up its market wider for the world and has actively participated in international trade even during the COVID-19 pandemic," Joseph Matthews, a senior professor at the BELTEI International University in Phnom Penh, told Xinhua. China has effectively coordinated COVID-19 prevention while maintaining its economic and social development, and will continue to be a stabilizing power in the region and the world, said Coskun Kucukozmen, a professor of trade and finance at Türkiye's Izmir University of Economics.

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Edited by Wang Miao