Ⅰ. International Financial Institutions are Optimistic about China's Economic Growth in 2023.
Recently, many international financial institutions have expressed their optimism about China's economic growth prospects, believing that the Chinese economy is one of the few positive factors that have boosted global expectations and is a "key driver" of global economic growth.
According to an analysis by CNBC, international financial institutions expect China's economic growth in 2023 to be 5.24% on average.
"World Economic Situation and Prospects for 2023" released by the UN predicts that although the world economic growth may slow to 1.9%, China's economic growth will reach 4.8% in 2023. IMF has revised China’s growth outlook significantly higher to 5.2% in 2023. International investment institutions, including Morgan Stanley, Goldman Sachs, HSBC and JPMorgan, have have predicted China's robust economic growth in 2023. Nomura Securities is now forecasting 5.3% up from 4.8%, Goldman Sachs 5.5% from 4.5%, and Morgan Stanley, the most bullish, expects China's economy to grow to 5.7%.
"Resilience", "strength" and "potential" have become the key words for foreign investors to be optimistic about the Chinese economy. "Chinese development is very likely to be one of the most important factor contributing to global growth in 2023." Kristalina Georgieva, IMF Managing Director pointed out.
During the World Economic Forum Annual Meeting 2023, participants agreed that China's adjustment of epidemic prevention and control policies would significantly reduce the possibility of a global economic recession, and China's opening up would help global economic growth.
Ⅱ. China's Economic Performance
A. Steady&Sound Development：China's Economy During the Three-Year Pandemic.
Over the past three years, China has struck the right balance between pandemic response as well as and economic&social development, achieved poverty alleviation and built a moderately prosperous society in all respects.
China's GDP exceeded 100 trillion yuan（15.91 trillion USD） in 2020, 110 trillion yuan(17.74 trillion USD) in 2021 and 120 trillion yuan(18.32 trillion USD) in 2022, maintaining an average annual growth rate of 4.5%, significantly higher than that of the world average 1.8%, and much higher than the United States（1.6%）,the Euro area（0.7%）and Japan（-0.3%）.
China accounts for more than 18% of the global economy and contributes around 30% to global growth. In the past three years, China's imports and exports of goods has grown at an average annual rate of 8.6% to exceed 40 trillion yuan(6 trillion USD), ranking first in the world for many years in a row. China's grain output has stood steady at 686 million tons every year, and more than 11 million new urban jobs have been created.
B. Highlight：China's economy in 2022
China's consumer price index (CPI) rose only 2.0% in 2022 , in sharp contrast to the high inflation of over 7% in major economies such as Europe and the US. China's total imports and exports of goods reached 42.1 trillion yuan(6.26 trillion USD), an increase of 7.7% over the past year, strengthening its position as the world's largest trading country in goods. China’s actual use of foreign capital reached 1,232.7 billion yuan（189.1 billion USD）, an increase of 6.3% over the past year. The urbanization rate has reached 65.82%. The ranking of global innovation index moved up from 12th to 11th. China’s Innovation input was close to the level of OECD countries. China exported 3.11 million vehicles, a huge increase of 54.4% year on year, becoming the world's second largest car exporter after Japan.
C. Rebound：China’s Economy After the Adjustment of Prevention and Control Policies
At the end of 2022, after China adjusted its epidemic prevention and control policy, the economy quickly returned to normal. During the Spring Festival, sales of key retail and catering enterprises increased by 6.8% YoY. The number of domestic tourist trips reached 310 million, up 23.1% YoY, and the number of inbound and outbound travelers exceeded 2.87 million, up 120.5% YoY. Sales revenue of consumption-related industries increased 12.2% YoY , an average annual growth of 12.4% compared with the 2019 Spring Festival holiday. The average daily passenger volume of subways in 10 major cities exceeded the same period in 2019, up 11% from 2022.
Ⅲ. What will China perform this year?
China's annual parliamentary meetings——Two Sessions, the National People's Congress (NPC) and the National Committee of the Chinese People's Political Consultative Conference (CPPCC) just concluded. According to the Government Work Report, the main targets for China's development this year are:
GDP growth at around 5%; Inflation rate of around 3%; Deficit-to-GDP ratio at 3%; Create around 12 million urban jobs and surveyed urban unemployment rate of around 5.5%; Grain output over 650 million tonnes.
China’s newly elected premier Li Qiang pointed out in his first press conference that the new government will focus on three aspects this year.
The first is to promote high-quality development. China will make greater efforts to fully and faithfully apply the new development philosophy on all fronts, move faster to create a new development paradigm and concentrate on promoting high-quality development. In particular, China will enhance the capacity for scientific and technological innovation, build a modern industrial system, and transition toward green development.
The second is to make full use of China’s talent dividend. China has more than 240 million people who have received higher education, and the average length of education received by new entrants into the workforce has increased to 14 years. Therefore, China’s demographic dividend has not disappeared, and its talent dividend is in the making. The driving force for China’s development remains strong. China will continue to pursue the employment-first strategy, increase government support in terms of employment services and technical training, take multiple steps to stabilize and expand employment, support and regulate the development of new forms of employment.
The third is to remain steadfast in deepening reform and opening-up. Reform and opening-up is a crucial move that has made China what it is today. China will continue to firmly pursue the path of reform and opening-up and will keep to the direction of socialist market economy reform, promote high-level opening-up, and inject stronger vitality into China’s development by deepening reform.
