China’s year of rabbit & future economic prospects
CHINA has entered into the “Year of Rabbit” which stands for hope, progress, prosperity and productivity.
With the start of “Chinese New Year”, the Chinese policy makers have now further geared up the process of opening-up.
New policy of prevention, control and adjustment of COVID-19 has been announced and institutionalized, making travelling, social mobility, manufacturing capacity and last but not the least, cross-regional connectivity easier and smoother.
Unfortunately, the US and the West have again started a new war of tug and imposed unjustified travel advisory and restrictions on Chinese travellers which the Foreign Minister of China has already strongly “condemned”.
The ongoing “World Economic Forum 2023” has again confirmed economic strategic strength, diversified utility and multidimensional productivity of the Chinese macro-economy, achieving and producing “miracles” in the country, region and beyond.
In this regard, most of the financial experts in the WEF 2023 are of the view that China’s reopening from COVID-19 restrictions could drive global growth beyond “expectations” and hopefully help avoid an imminent global recession because of struggling and declining of world’s largest economies.
Most recently, the National Bureau of Statistics of China (NBSC) released the 2022 economic data, indicating that the country’s GDP increased by 3 percent.
Despite external economic prolonged economic protectionism orientations, unilateral socio-economic & trade sanctions and punitive legal embargoes imposed by the US and the West and last but not the least, fabricated hurdles in the sustained global supply chains China’s economic nullified economic predictions of the IMF and World Bank in which its agriculture, high-tech manufacturing and equipment manufacturing sectors outperformed other sectors.
Furthermore, employment and prices were generally stable, high-quality development achieved new dividends and the economic output reached a new level.
Hopefully, the entire Chinese economy will definitely improve further in 2023. It will remain resilient, sustainable and innovative during 2023 and beyond.
In this regard the ongoing “Chinese Spring Festival” shows that domestic travel bookings have already increased by more than 70 percent year-on-year, while international travel has soared 260 percent which is good omen for its economy and may be value addition for the regional & world quick economic recovery.
Various international institutions believe that the Chinese economy will further pick up the growth trend in the second quarter of 2023 and economic productivity will be geared up more quickly.
In this connection, consumption will be further increased and the year-on-year growth rate of GDP may rise sharply.
Economic growth of China has multiplier effects on all the regional economies as well. It is hoped that the tourism industries in Southeast Asia, Europe and other countries have high expectations, but some companies such as German and Japanese ones have also begun to accelerate their investment in China.
The Central government of China has already initiated many integrated and meaningful policies to further develop the private economy and small, medium and micro enterprises.
The Central Economic Work Conference (CEWC) which was held during December 2022 emphasized to encourage and support the growth of the private economy and private enterprises.
It seems that the constant structural economic reforms of China have transformed its private economy and small, medium and micro enterprises have now become the main source of China’s economic diversity and sustainability and innovation after the gradual opening-up.
World Bank officials (January 2023) have warned that the global economy would be in severe recession and decline during 2023.
Nevertheless, they have raised their optimistic expectations for the Chinese economy. Its inflows of the FDIs have continued to rush to increase.
Its public spending is constantly on the rise showing its economic strength, sustainability and diversity.
According to the Chinese official figures (January 2023) the net purchase of 89. 146 billion RMB since January is recorded which is close to the net purchase amount of 90.02 billion RMB in the whole year of 2022.
According to the International Monetary Fund (IMF), China has the ability to recover which would be the single most important factor for global growth in 2023.
The OECD termed China’s reopening as “overwhelmingly positive” in global fight to tackle surging inflation.
Moreover, the Washington Post dubbed China’s opening as supportive to global consumer and business activity that could prevent global economy from tumbling into recession.
To conclude, undoubtedly the Chinese economy has become the “ultimate hope” of the entire world.
It seems that in the last 40 years of reforms and opening-up, the Chinese economy has created countless socio-economic miracles (lifting more than 850 million people from extreme poverty, formation of the world largest social nets & human insurance, global manufacturing hub and champion of global green development).
The Chinese latest figures reveal that China’s GDP expanded 3 percent year-on-year to 121 trillion RMB ($18 trillion) during 2022, climbing above 120 trillion RMB benchmark for the first time as the world’s second-largest economy navigated hot waters during 2022.
The increasing “conspiratorial” geopolitical tensions and geostrategic “compulsions” along with intentional increase in “US FED in the interest rate” and waning overseas demand tried to “derail” Chinese economy but “miserably” failed to do so.
Despite constant price hikes and inflationary trends because of prevailing energy and food insecurity in the region and the world, China’s national economy “outperformed” other major economies including the US, Japan and Germany during 2022.
It again reconfirmed China’s supportive, facilitating, integrative and dual role as both the “locomotive” and the “stabilizer” of the world economy during 2022.
Its macro-economy “growth” and “manufacturing capability” successfully rescued the world economy from the high inflation and stabilized the supply chains.
Comparative analysis reveals that its GDP increased an impressive 4.57 percent which shows its long term economic fundamentals.
Even a deadly pandemic could not “deter” its economy and “resilient” human spirits and both remained positive and productive during 2022.
Interestingly, the year 2023 starts on a “positive” note with public spending, country-wide consumption, high industrial production, innovation and opening-up which is good omen for the region and the world alike.
The consumer confidence is high which would be useful for achieving GDP growth of above 5 percent in 2023.
Moreover, according to the Chinese data (December 2022), its economic output jumped to a new high, topping 120 trillion RMB in 2022 which were 110 trillion RMB and 100 trillion RMB in 2021 and 2020, respectively, and China maintains its standing as the world’s second-largest economy.
Interestingly, China’s GDP per capita stayed above the $12,000-mark for two years in a row, close to the high-income countries.
Its positive economic outlook stands for China’s comprehensive national strength, social productivity, international influence and people’s livelihood.
It promises a more comprehensive socio-economic development, qualitative development, increasing innovation, diversification, persuasions of green development in which its mega projects of greater regional connectivity (BRI & CPEC) and global socio-economic integration (GDI & GSI) would play an important role in days to come.
—The writer is Executive Director, Centre for South Asia & International Studies, Islamabad, regional expert China, BRI & CPEC & senior analyst, world affairs, Pakistan Observer.