China’s economy has survived worst moment, officials say

BEIJING – China’s economy has survived the most difficult phase and the country’s optimized COVID-19 response measures will have a positive effect on the economic recovery, according to officials and experts.

They said China will gradually shake off the impact of COVID-19 and post a notable economic rebound in 2023, given the further implementation of optimized measures and the more pro-growth focus of policymakers.

However, they warned of troubles in the real estate sector, as well as strong external headwinds being a drag on the economy, and underlined that improving expectations and boosting market confidence will hold the key to economic recovery next year.

Yin Yanlin, deputy director of the office of the Central Committee for Financial and Economic Affairs, said the optimization of the COVID-19 containment measures will create favorable conditions for economic recovery.

“The worst moment is over,” Yin said on Saturday at an annual meeting on China’s high-quality development held by the China Wealth Management 50 Forum. “With the implementation of the optimized COVID containment measures, (China will see) smoother flow of people and logistics, and accelerated recovery in business and social activities.”

Yin’s remarks came after the tone-setting Central Economic Work Conference concluded in mid-December, sending a clear signal that reviving the COVID-hit economy and bringing GDP growth back to a reasonable range will be among the government’s key tasks.

Citing key tasks mapped by the annual work conference, Yin said Beijing’s adoption of a more proactive approach will aid the economic rebound.

“The downturn in recent years is only a short-term disturbance caused by the pandemic, which is not enough to change the long-term trend of China’s economic development,” he said. “The fundamentals of the Chinese economy — its long-term sustainability, strong resilience, enormous potential and vast room for maneuvers — remain unchanged.”

Yin warned of difficulties and challenges ahead, including a more complicated external environment and slowing global demand, saying that further steps should be taken to rebalance growth with a key focus on boosting market confidence, spurring consumption, expanding effective investment and promoting healthy development in the property market.

His views were echoed by Zhu Guangyao, former vice-minister of finance, who said China’s economy will likely improve as a whole in 2023, given the more pro-growth focus of policymakers for next year.

“China’s economy will return to its potential growth rate of between 5 percent and 6 percent in 2023 to post a healthy development,” Zhu said during the meeting on Saturday.

In the past three years, China’s economy expanded at an average annual growth rate of 4.5 percent, lower than the potential rate, said Wang Yiming, former deputy director of the Development Research Center of the State Council.

“The recently held Central Economic Work Conference has sent clear and positive signals of stabilizing growth, boosting domestic demand, supporting the development of private sector economy and stabilizing the property market, which strongly improved the expectations and bolstered market confidence,” Wang added.