Beijing, March 27, 2023 (Archyde.com) /PRNewswire/ – In the past three years, China has weathered multiple waves of COVID-19 with massive vaccination campaigns. This has allowed the country to maintain the lowest rates of serious illness and mortality in the world.
In response to the ever-changing situation, China has optimized its COVID-19 response strategy by coordinating epidemic prevention and control with economic and social development.
In early 2023, China’s economy is showing positive signs, with multiple developments suggesting China’s ability to drive global growth.
Data from the National Bureau of Statistics (NBS) shows that China’s value-added industrial production, a key indicator on the supply side, rose 2.4 percent year on year in the first two months of 2023.
On the demand side, the key figures for consumption, investment and foreign trade increased in the same period. Retail sales of consumer goods and fixed investment rose 3.5 and 5.5 percent, respectively.
Steady economic growth
As consumer confidence gradually recovers and pro-consumption measures take hold, the NBS expects the pickup in consumption to continue.
To boost domestic consumption, the government has taken supportive measures across the country, including issuing shopping vouchers to the public and holding pro-consumption festivals.
According to the State Council, China continues to attach importance to high-quality development, including promoting the real economy, promoting high-end manufacturing and accelerating the construction of a modern industrial system.
The country aims for steady economic growth and has set a target of gross domestic product (GDP) of around 5%.
Despite the rebound in the first two months of this year, China needs to keep stimulating consumer spending and strengthening the basis for sustained economic recovery, NBS spokesman Fu Linghui said at a news conference last Wednesday.
Beginning March 27, the People’s Bank of China will cut the Reserve Requirement Ratio (RRR) for financial institutions (excluding those already implementing a 5 percent ratio) by 0.25 percentage points. After the cut, the weighted average RRR for lenders will drop to around 7.6 percent.
This move aims to maintain an adequate level of liquidity to feed the real economy and stimulate domestic demand with financing.
Stable growth despite difficulties
China’s economy has maintained stable growth despite the resurgence of COVID-19 over the past year.
According to the NBS, the country’s GDP will hit an all-time high of 121 trillion yuan (about 17.95 trillion U.S. dollars) in 2022, after surpassing 100 trillion yuan in 2020 and 110 trillion yuan in 2021.
At the same time, industrial added value increased by 3.6 percent compared to the previous year. In particular, high-tech manufacturing and equipment manufacturing sectors showed significant growth momentum, with output values increasing by 7.4% and 5.6%, respectively.
Despite numerous challenges over the past three years, China has kept its economy stable. It was one of the first countries in the world to resume work and reopen business in 2020, and was the only major economy to post positive growth that year.
“China has made efforts to minimize the impact of the pandemic on its supply chains and business operations,” said Professor Liu Bin at the China Institute of WTO Studies at Beijing University of Foreign Economics and Trade.
To stabilize economic growth, China has taken various measures, including mobilizing funds for infrastructure investment, reducing utility costs for market participants, and supporting companies hard-hit by the pandemic to ease their financial burden.
According to Liu, China’s economic growth recovery is expected to outpace the international market, which is important to boost confidence in the global economic recovery.
Because of China’s great importance in world trade, the country’s economic recovery could boost the global economy, Liu said.
Data from the General Administration of Customs shows that China’s total trade in goods reached 42.07 trillion yuan (about $6.21 trillion) in 2022, ranking first in the world for the sixth consecutive year.
In addition, official data shows that China has been the world’s export champion for 14 consecutive years, accounting for 14.7 percent of the global export market.
“Aside from the important role China plays in world trade, its exports also contribute greatly to GDP growth,” said Bai Rangrang, associate professor of the Department of Applied Economics at Fudan University’s Faculty of Management.
“To a certain extent, the decline in private consumption and business investment over the past year has been offset,” he said, noting that one important reason is China’s opening up to the world.
Analysis: China’s economic resilience bolsters the global outlook for China’s economic recovery, which is showing positive signs in early 2023, with multiple developments pointing to its ability to drive global growth. CGTN, China Global Television Network
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