'New Approaches': How China's economy maintained resilience, picked up recovery
BEIJING, Dec. 19, 2022 /PRNewswire/ -- Some media raised their tone reporting that China's COVID-19 controls have hurt the country's economy.
In the three years combating the epidemic, China's economic growth rate has slowed down when compared to itself. However, it is still leading other major economies.
Based on economists' estimation of the growth rate at 3.3 percent this year, China's economy will achieve an average annual growth rate of 4.5 percent from 2020 to 2022, beating all major economies in the world in the same period.
In 2020, China's early containment of COVID-19 helped it to restore production capacity, making it the only major economy to see positive growth. Despite the strict COVID control measures depressing consumption and services in some cities in the following two years, the country's industrial production and exports remain strong.
"The global dependence on China's production had gone up. Foreign investments in China have been quite active even during the peak of the COVID pandemic," Wang Dan, chief economist at Hang Seng Bank China, told CGTN.
To offset the impact of COVID-19 on the economy at an earlier stage, most major economies injected vast amounts of liquidity into their markets.
"The U.S. and Europe have been generous in handing out cash to households, which was essential to cushion the downside effects for vulnerable families, yet also the main source of the high inflation," Wang said.
Earlier this year, the U.S. and major economies in Europe have seen their inflation hit decades-high, leading their central banks to hike interest rates at an above-normal speed to tame high-flying prices. Amid persistent inflation, consumers have begun tightening their belts, according to local media.
In comparison, China's monetary expansion has been moderate in response to the pandemic, focusing on helping businesses so that they could continue to provide jobs and a stable income for households.
China has done an "excellent job" in stabilizing prices this year, which fully reflected the flexibility and pertinence of its macro-control policies, said Dong Yu, executive vice-president of the China Institute for Development Planning, Tsinghua University.
Recently, China has announced 10 new measures to further optimize its prevention and control of COVID-19, part of its effort to balance epidemic control with economic and social development.
The country has lifted restrictions on traveling and no longer requires negative PCR testing results and health codes, except for special places.
The new measures will help to restore the services sector, but economic performance will "get worse before it gets better," Wang said.
As infections spread, some people choose to stay at home to try to avoid crowds and contracting the virus. This is mirrored in a limited recovery in mobility and business activity.
The new measures will pave the way for a full recovery, Wang said, adding that the economic recovery will accelerate throughout 2023, with the recovery in consumption as the main driver for domestic demand. "We expect the retail level to return to the 2019 level by the end of 2023 and gradually converge to the historical trend after 2024."
China's annual Central Economic Work Conference held in Beijing from Thursday to Friday has vowed to boost domestic demand next year by prioritizing the recovery and expansion of consumption.
Economists forecast China's GDP growth to reach around 5 percent in 2023, while the U.S. and the euro zone are expected to increase by about 1 percent and contract by 0.2 percent, respectively.
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