Beijing, China / TimesNewswire / January 17, 2023 – China’s GDP recorded a growth of 3 percent, surpassing 121 trillion yuan (about $17.95 trillion), in 2022, according to official figures released on January 17, 2023. Despite the challenges posed by the COVID-19 pandemic, China’s real per capita disposable income increased by 2.9 percent. How will China’s economy perform in 2023? There are three realities needed to be considered.
Reality 1: Policies that will unleash higher potential
Zhao Chenxin, the Deputy Director of the National Development and Reform Commission, said that China will strengthen policy coordination across the year, taking steps to unleash policies introduced that will have a big impact in the second half of 2023.
Last December 2022, China’s Central Economic Work Conference laid out recommendations in its report about the future of China’s economic growth. China will encourage private enterprises, micro, small and medium business entities. Small and medium enterprises account for about 90 percent of China’s enterprises, contribute to 70 percent of technological innovations, 60 percent of GDP and more than 50 percent of taxes.
It also proposed using targeted expansionists fiscal, monetary programs and policies – meaning, supporting the economy where necessary. “We need to encourage and support the private sector economy and private enterprise in terms of policy and public opinion,” the report said.
And at a national conference held at the end of December 2022, Minister of Finance Liu Kun called for efforts to leverage the proactive fiscal policy in a more direct and effective manner, fine-tune supportive policies for enterprises and boost confidence of the market.
Shan Hui, the chief economist at Goldman Sachs China, said in an interview that “while the initial phase of re-opening may hurt growth, the rebound thereafter should be significant.”
Reality 2: Rapid restoration of economic and social lives
The Office of the Central Financial and Economic Affairs Commission said that the restoration of China’s economic and social order will restore enormous vitality, facilitate economic circulation and accelerate growth.
The rebound is accelerating. In Shanghai, the total offline consumption from December 31, 2022 to January 1, 2023 hit 12.01 billion yuan ($1.74 billion), according to the Consumer Market Big Data Laboratory.
According to the Ministry of Transport, the upcoming Spring Festival travel will see the number of passenger trips surging 99.5 percent year on year to nearly 2.1 billion, resuming to about 70.3 percent of the same period in 2019.
Reality 3: It takes two to tangle – China and international community progress together
Even before the COVID-19 policy change, China maintained strong connections with the international community. According to China’s General Administration of Customs, China’s foreign trade value topped 40 trillion yuan (nearly $6 trillion) for the first time in 2022. Its total trade reached 42.07 trillion yuan, an increase of 7.7 percent year on year, topping the world for six consecutive years.
And starting on December 30, 2022, market entities no longer need to provide foreign-trade operator registration materials in applying for import and export licenses in China. It is a major step forward in liberalizing trade and the business environment.
With the COVID-19 policy change, China is set to engage more closely with the international community in promoting global economic recovery. China is the world’s largest growth engine, contributing to 30 percent of global economic growth. Chinese students, tourists and entrepreneurs will be out in the world, rebuilding the pipelines of communication and businesses that were disrupted by three years of the pandemic.
