China brings certainty to global recovery

Trucks wait to load containers at a container terminal in the city of Rizhao, Shandong province, eastern China on March 28, 2022. XINHUA FILE PHOTO 

BEIJING: China’s economy demonstrated remarkable resilience in 2022, bringing much-needed certainty and vitality to a world facing unprecedented challenges amid coronavirus-induced disruptions and geopolitical tensions.

The East Asian country has intensified its macro-control this year to cope with the impact of “factors beyond expectations” and maintained overall economic and social stability, according to the tone-setting annual Central Economic Work Conference last week.

Acknowledging the presence of domestic pressures and external volatility, policymakers at the meeting said they anticipated an overall improvement in the country’s economic performance next year, citing strong resilience, potential and dynamism in the economy, and the support of pro-growth policies.

V-shaped growth

This year has not been an easy one for China. After registering only 0.4-percent gross domestic product (GDP) growth in the second quarter due to the surge in Covid cases, fueled by the highly transmissible Omicron variant, the economy expanded 3.9 percent in the third and continues to drive growth worldwide.

The V-shaped recovery came along with the continued improvement of that growth’s quality. In the first 11 months, fixed-asset investments in the high-tech sector jumped 19.9 percent year on year while the added value of high-tech manufacturing rose 8 percent.

From January to November, both sales and export volumes of China’s new energy vehicles ranked first globally, and the country’s electronic commerce sector showed strong momentum after online sales saw their share expand.

Meanwhile, great strides were made in technological innovation. In the Global Innovation Index 2022 of the World Intellectual Property Organization, China rose to 11th place among the 132 economies surveyed.

Though China’s annual GDP growth rate is unlikely to reach the target set at the beginning of the year, many other development goals have been met, said Han Wenxiu, executive deputy director of the office of the Central Committee for Financial and Economic Affairs. He expects the country’s economic output for this year to exceed 120 trillion yuan in value.

The government’s optimized Covid-19 response, combined with existing and incremental policies, will have a major positive impact on economic recovery, Han said, adding that life and work was expected to return to normal in the second quarter of 2023 as economic vitality is enhanced.

Liang Guoyong, a senior economist at the United Nations Conference on Trade and Development, expects the Chinese economy to register a strong recovery next year, with growth momentum considerably strengthened.

“This will provide an important impetus for global economic growth and contribute to its overall stability,” he said.

Higher-standard opening-up

As the world’s largest trader of goods and second-largest trader of services, China has taken concrete steps to advance what it calls higher-standard opening-up this year, delivering greater benefits to the rest of the world.

These include accelerating the development of pilot free trade zones and the Hainan Free Trade Port; introducing a shorter negative list for foreign investment; and rolling out new measures to encourage manufacturing-focused foreign investment.

Attracted by China’s huge market, solid economic growth and an improving business environment, many multinational corporations are betting on the Chinese market and increasing their operations and investments here despite gloomy global investment sentiment.

In the first 10 months, actually used foreign direct investment (FDI) in the Chinese mainland increased 14.4 percent year on year to 1.09 trillion yuan, official data showed. Among sectors, high-tech manufacturing saw its FDI inflows surge 57.2 percent from a year earlier.

Foreign trade also posted steady expansion. From January to November, total trade grew 8.6 percent year on year to 38.34 trillion yuan, according to the General Administration of Customs.

“Amid rising uncertainties in [the] global economic recovery, China’s continuous high-quality opening up mirrors the country’s firm determination, huge market potential and great policy synergy, which will boost global market confidence,” said Gu Xueming, head of the Chinese Academy of International Trade and Economic Cooperation under the Ministry of Commerce.

Stable industrial chains

As one with the world’s biggest and most complete industrial system, China has played a crucial role in mitigating the impact of global industrial chain snags this year.

To stabilize these chains, many cities in China have expanded their transportation services and launched new direct air and sea routes to facilitate the cross-border flow of people and goods, thus bolstering international trade and global recovery.

China-Europe freight trains have also been playing a critical role in stabilization efforts. As of the end of October, 82 China-Europe freight train routes had been launched, reaching 204 cities in 24 European countries. These routes have logged 62,000 freight train trips that transported 5.76 million 20-foot equivalent units of goods.

By strengthening the resilience of industrial and supply chains, China has helped ease inflationary pressures worldwide.

While people in some Western countries are paying a high price for inflation, China kept its consumer price index — a main gauge of inflation — relatively low in the first 11 months and took steps to ensure sufficient grain output and stabilize prices.

Zhang Zheren, an analyst from the Institute of Foreign Economic Research under the National Development and Reform Commission, believes that China’s stable economic growth, along with its advanced manufacturing prowess and prudent monetary policy, have made it a significant “stabilizer” for global costs.

“I believe that in the future, with the impact of the pandemic easing domestically, China’s strong productivity and the diversified opening up platform will contribute more to the stability of global prices,” Zhang said.