International Observation | China's Economy Shows Resilient Development Prospects Highly Anticipated by the World | China | Economy

Washington, July 27th (Xinhua) -- The resilient development prospects of the Chinese economy are highly anticipated

Xinhua News Agency reporter Xiong Maoling and Shi Chun

The International Monetary Fund recently predicted that China's economy will grow by 5.2% this year, which is consistent with the April forecast. Against the backdrop of weak global economic recovery, the Chinese economy has shown resilience. International economic and academic experts have stated that the Chinese economy is facing difficulties and challenges, and its ability to withstand pressure has been tested. The economy continues to recover and overall rebounds, remaining an important engine of global economic growth.

China's economic resilience has comparative advantages

On the 5th, IMF25 released an update to the World Economic Outlook report, which predicts that the world economic growth rate will drop from 3.5% last year to 3.0% this year, which is 0.2 percentage points higher than the predicted value in April. The IMF also pointed out that global economic growth remains weak and faces multiple downward risks.

The economic slowdown is mainly concentrated in developed economies. The IMF predicts that the growth rate of developed economies will decrease from 2.7% in 2022 to 1.5% in 2023. The expected economic growth rate for the United States in 2023 is 1.8%, and the growth rate will slow down to 1.0% in 2024. The economic growth expectations for the Eurozone for the next two years are 0.9% and 1.5%, respectively.

In the context of a sustained global economic downturn, the IMF predicts that China's economy will grow by 5.2% and 4.5% respectively this year and next, ranking among the top among major economies.

According to the latest IMF forecast, the growth rate of global trade in 2023 will only be 2.0%, which is 0.4 percentage points lower than the April forecast and significantly lower than the 5.2% growth rate in 2022, indicating a weak global demand trend. In contrast, China's goods trade exports increased by 3.7% year-on-year in the first half of the year.

In the medium term, it is difficult for the world economy to recover its growth rate before the COVID-19 epidemic. The IMF predicts that the world economy will grow at around 3% in the next five years. This expected growth rate is far below the average level of 3.8% in the past 20 years.

"More and more signs indicate that global economic activity is losing momentum," IMF Chief Economist Pierre Olivier Gulansha pointed out that the world economy has not yet emerged from its difficulties and is facing ongoing challenges.

Sebastian Schultz, a researcher at the Center for Chinese Studies at the National University of La Plata in Argentina, believes that in the current uncertain world economic situation, the Chinese economy still maintains stable growth, demonstrating development resilience.

Tokyo Women's University special professor Kazuki Hasegawa said that in the context of interest rate hikes in European and American countries and high uncertainty in the world economy and financial environment, stable development of the Chinese economy is crucial for global economic recovery.

China's economic resilience has been tested

The current Chinese economy is continuously recovering, with an overall recovery and improvement. However, it also faces some new challenges and difficulties, including a severe and complex external environment.

Analysts point out that the aggressive interest rate hikes by central banks of developed economies such as the Federal Reserve continue to amplify global economic and financial risks; American and Western politicians advocate for "risk reduction" and intensify efforts to promote "decoupling and disconnection" with China in areas such as economy, trade, and technology; The overall global economic downturn and shrinking external demand have also put pressure on the Chinese economy.

Australian economist Guo Shengxiang pointed out that despite facing numerous external constraints, the Chinese economy is still expected to achieve its expected growth target of around 5% this year, which is sufficient to demonstrate that the Chinese economy has strong resilience in resisting these external risk tests.

Borg Brend, President of the World Economic Forum, said that although China faces some challenges in the short term, he is confident in the prospects of China's economic growth because "China has taken many correct measures to support economic growth.". A survey by the World Economic Forum shows that business people are full of expectations for opportunities in the Chinese market in the post pandemic era.

"China is one of the fastest-growing economies in Asia... We are very optimistic about the prospects of China's economic recovery," said Hesse Gates, Secretary General of the Organization of the Petroleum Exporting Countries.

Some analysts say that in the face of external challenges, the Chinese decision-makers maintain strategic composure, refuse to flood and avoid strong stimulus measures, making the Chinese financial and monetary policy toolbox still full and having huge room for maneuver.

Zhao Qiuyun, a researcher at the Institute of New Structural Economics at Peking University and director of the Domestic Development Cooperation Department, pointed out in an article that the reason why the "China Collapse Theory" advocated by the outside world has repeatedly gone bankrupt since the reform and opening up, and why the Chinese economy can achieve a growth miracle, is because China adheres to its own development stage and basic national conditions, and scientifically formulates development plans.

"The vast real economy and advanced scientific and technological innovation capabilities are the foundation and guarantee for China to achieve sustainable development, as well as important factors for the Chinese economy to resist external shocks," said Egyptian economist Walid Jabala.

Stable growth of the Chinese economy is expected

The Political Bureau of the Central Committee of the Communist Party of China held a meeting on the 24th, conveying a new trend of firmly promoting high-quality economic development. After the meeting, the stock markets in China and other Asian regions generally rose, reflecting investors welcoming the policy signals released by Chinese decision-makers and having confidence in China's economic governance.

Stephen Innis, Managing Partner of Swiss SPI Asset Management, stated that the Politburo meeting of the Communist Party of China has set an encouraging tone for future policies.

The signals from China regarding the practical optimization of the development environment for private enterprises and greater efforts to attract and utilize foreign investment have also received attention. Morgan Stanley believes that in the context of long-term challenges such as population, debt, and risk reduction, this is crucial for maintaining productivity growth.

Several well-known financial institutions, including JPMorgan Chase, Citigroup, and Morgan Stanley, are expected to achieve their expected growth targets for the Chinese economy this year. IMF analysis suggests that China's contribution to global economic growth will reach around one-third this year.

Having a positive outlook on the Chinese economy, some well-known European and American companies choose to continue betting on China.

Western pharmaceutical companies such as Pfizer and AstraZeneca recently revealed that they attach great importance to their business in China and have reached multiple cooperation agreements with Chinese companies. Konlinsong, Chairman of the Board of Directors of Mercedes Benz AG in Germany, recently stated that China, the world's largest automotive market, will be the center of the company's electric vehicle marketing activities starting from 2025.

"Investing in China is investing in the future," Jean Paul Angong, Chairman of L'Oreal Group in France, told reporters. With further market opening, improved business environment, and promising measures to boost domestic demand, China is embracing the world and bringing opportunities to the world.