Long-term good confidence! China’s strong economic recovery will boost global economic growth.
China Daily Online, January 5 According to a recent report by the China Journal, the hope that China’s economy can recover strongly and continue to be the engine of the world economy is rising when the world is facing multiple challenges. Economists have warned that a potential global economic recession is approaching due to the tightening of the financial environment and the suppression of demand, geopolitical tensions continue. The International Monetary Fund (IMF) said that "the worst is yet to come" and predicted that global economic growth will further weaken in 2023. However, after the optimization and adjustment of epidemic prevention and control measures in China, its economy will recover strongly and play a significant role in boosting global economic stability and growth.
On January 1, 2023, people took pictures in front of the Drum Tower in Beijing. (Source: China Daily)
Epidemic prevention policy, optimization of economic activity growth and boosting the world economy
After the optimization and adjustment of epidemic prevention policies in China, production and life in many cities such as Beijing have gradually returned to normal, and economic vitality has recovered. According to Xinhua News Agency, the number of subway passengers in Beijing, Chengdu and Wuhan increased by 40% one week before New Year’s Day & mdash; 100%, the degree of traffic congestion increased by about 150%— 240%, indicating that residents in these areas are returning to work, shopping and restaurants.
On December 30, customers were buying new year goods in the new year market area where the Beijing New Year Festival was launched. (Source: Xinhua News Agency)
According to the data of Wind Info information, a market tracking agency, 6,316 domestic flights took off on December 26th, almost twice as much as a month ago, while the box office revenue of national movies rose from 14.47 million yuan a month ago to 106.17 million yuan the day before.
Image source: vision china
On New Year’s Day holiday, the daily average number of passengers sent by national railways increased by 109% compared with last November. Domestic tourism revenue was 26.517 billion yuan, a year-on-year increase of 4.0%; On the first day of the new year, the number of operating cinemas nationwide hit a new high in the past 10 months; On the first day of "2023 National Online New Year Festival", the national online retail sales reached 45.2 billion yuan, 6.5% higher than the first day of last year’s New Year Festival. In the first holiday after the optimization and adjustment of epidemic prevention and control policies, one of the most important "Troika" to boost China’s economy — — Consumption is picking up, sending a positive signal that China’s economy is improving.
On December 23, 2022, Beijing, the Second Ring Road was busy in the morning. (Source: Oriental IC)
The positive signals released by the growth of economic activities have convinced more and more international investment banks and asset management companies that China’s economy will rebound sharply.
Singapore’s Lianhe Zaobao quoted economists as saying that it is increasingly likely that China’s economy will rebound faster and stronger in 2023. Bloomberg reported that although the economic and social activity is much lower than that before the epidemic, the rapid rebound of vitality in Beijing and other cities shows that once the epidemic is over, China’s economy can recover faster than expected.
The Financial Times quoted analysts from Citibank as predicting that the total retail sales of social consumer goods in China will increase by 11% to 50 trillion yuan in 2023, and most major cities will pass the epidemic peak before mid-January. According to the report, investors and analysts predict that "the coming year will be brighter". The Reuters report quoted Zhou Hao, chief economist of Guotai Junan International, as saying: "Generally speaking, we believe that the worst period of China’s economy has passed, and a strong economic recovery is ahead."
Kristina Hooper, chief global market strategist of Jing Shun Investment, a global investment management company, said that the optimization and adjustment of epidemic prevention policies and measures to stabilize the real estate industry "will help promote China to become a key growth engine in 2023".
Experts say that many factors will promote China’s economic recovery in the coming year. The world’s second largest economy may recover through a stable and turbulent global economy, or it will become a more important driving force for the world economy.
On December 24, 2022, citizens were shopping and relaxing at Jianghan Road Pedestrian Street in Wuhan. Recently, the popularity of various business districts and pedestrian streets in Wuhan has obviously rebounded. (Source: Oriental IC)
According to a report by Goldman Sachs, the potential rebound of consumer spending in China may accelerate the import of goods and services and help boost the GDP of economies such as Singapore and Australia, while Thailand and Viet Nam may be the biggest beneficiaries of the international tourism recovery of China tourists.
With the orderly recovery of China citizens’ outbound tourism, countries and regions that rely on tourism have begun to look forward to the stimulating effect of China tourists on the local economy.
The institutional advantages are obvious, and macro-control is powerful.
China Daily quoted Zhang Bin, deputy director of the Institute of World Economics, Politics and Metallurgy of China Academy of Social Sciences, as saying that financial and monetary support should be strengthened this year to ensure the steady expansion of domestic demand.
The Central Economic Work Conference held in mid-December, 2022 proposed that under the pressure of "demand contraction, supply shock and expected weakening", domestic demand should be expanded by expanding consumption to promote economic growth. The meeting stressed that it is necessary to strengthen the overall coordination between epidemic prevention and control and economic and social development, and strive to optimize epidemic prevention and control. The Central Economic Work Conference regards "focusing on expanding domestic demand" as the key task in 2023, and puts forward that restoring and expanding consumption should be given priority.
Focusing on expanding domestic demand, the Central Economic Work Conference proposed to enhance consumption capacity, improve consumption conditions and innovate consumption scenarios. Increase the income of urban and rural residents through multiple channels, and support consumption such as housing improvement, new energy vehicles, and old-age services. The meeting proposed that the proactive fiscal policy in 2023 should be strengthened to improve efficiency and play a more direct and effective role in proactive fiscal policy. A prudent monetary policy should be targeted and effective, and maintain a reasonable and sufficient liquidity.
Yin Yanlin, deputy director of the Office of the Central Committee of Finance and Economics, said on December 24 that the change of epidemic prevention will first have a major positive impact on economic recovery. The epidemic situation is a key variable affecting the economic operation at present, and China’s economy has survived the most difficult moment. With the implementation of the policy of optimizing and adjusting epidemic prevention and control, people and logistics will be smoother, and all areas of economic and social life are expected to accelerate recovery, and economic vitality will be effectively released.
On January 1, 2023, people ate in a restaurant in Beijing. (Source: Xinhua News Agency)
In its latest China Economic Update, the World Bank said that consumer confidence is expected to improve as pent-up consumer demand is released after the first quarter.
Bank of China — — Liu Guoqiang, deputy governor of the People’s Bank of China, said that the strength of monetary policy should not be less than last year. "If necessary, further efforts will be made unless economic growth and inflation exceed expectations." Regarding the monetary policy requirements put forward by the Central Economic Work Conference, Liu Guoqiang summarized it as "the total amount should be sufficient and the structure should be accurate".
Hu Yifan, investment director and macroeconomic director of UBS Wealth Management Asia Pacific, said that the company predicted that offline consumption would increase as economic activities returned to normal. The year-on-year growth of retail sales in China may rebound from about 1% last year to at least 5% this year. Hu Yifan said that the rebound in consumption may contribute to more than half of the national economic growth this year, and the year-on-year growth may rise from 3% last year to about 5%. At the same time, investment growth will remain strong this year due to the narrowing of the decline in infrastructure construction supported by high-speed rail projects, manufacturing investment promoted by high-tech industries and real estate development investment. In the case of weak global demand, the recovery of domestic demand may help offset the downward pressure on the economy caused by the slowdown in exports.
Data from the National Bureau of Statistics (NBS) show that from January to November last year, China’s exports increased by 11.9% year-on-year, reaching 21.83 trillion yuan, but the monthly growth rate dropped to 0.9% in November, which indicates that with the slowdown of global economic growth, exports are facing downside risks.
Experts said that this situation highlights the importance of increasing policy support to ensure a strong rebound in domestic demand, especially when consumption recovery still faces obstacles such as rising unemployment.
At present, all localities are actively seizing time to promote the recovery of economic vitality and lay the foundation for a good start for the economy in 2023. China’s economy has strong resilience, great potential and full vitality, and the fundamentals of long-term economic improvement have not changed. Confidence is gold. It is believed that with the introduction and implementation of more new policies and measures, China’s economic operation is expected to rebound overall, and the foundation for economic recovery and development will be strengthened, so as to make a good start for building a socialist modern country in an all-round way with high-quality development and new achievements.
(Compile: Yip Wong Editor: Han He)