China’s Significant Contribution
to the World Economy Will Continue
On February 16th, China announced to the world its successful achievement in the prevention and control of the COVID-19 epidemic. From the control measures to the timely reopening, although more than 1.1 billion people in China have been affected, China’s death rate from the virus has remained at the lowest level globally.
Cumulative confirmed COVID-19 cases by world region
Regarding the issue of virus control and how to maintain economic development during the pandemic, both China and the United States have made inevitable mistakes over the past three years. According to Harvey Zhuo Ding, a senior researcher at the Center for China and Globalization (CCG), experiencing the uncertainty of the epidemic, China and the United States have handled their challenges differently. This is a story about two governance systems – one successful, the other struggling.
Since January 2020, China has been strictly controlling the COVID-19 pandemic and recovered its economy in January 2023, indicating that China is now fully focused on revitalizing its economy and helping the global economy simultaneously. However, as the world’s largest economy, the United States is not as optimistic. According to a report by the Associated Press on February 15th, the Congressional Budget Office predicts that the US economy will remain stagnant this year, with the unemployment rate soaring to 5.1%.
Many people lost confidence in China’s economic potential because of the three-year pandemic. People have asked on the Internet, “Can China’s economy recover to its 2019 level in 2023?” Some have answered that China’s GDP was 98.65 trillion in 2019 and 121.02 trillion in 2022. So what could cause an economic slump in China in 2023?
From 2020 to 2022, China’s GDP grew at an average annual rate of about 4.5%, far higher than the world’s average annual growth rate of about 1.8% during the same period, as well as the average annual growth rate of the United States, the European Union, Japan, and other countries. Under the pressure of the pandemic in the past three years, China has made efforts to maintain the stability of the global industrial and supply chains. The Chinese government is clearly aware that reducing the impact on its economy is key to maintaining the global economic recovery. According to the latest estimates by the World Bank and the OECD, China is expected to contribute 42% to 48% of the world’s economic growth in 2023.
However, predictions for China’s economy may be limited until mid-March. International financial institutions are likely to look forward to the upcoming “Two Sessions” in Beijing next month. The new Chinese government led by Premier Li Keqiang will definitely have more means to boost China’s economy, and by then, the economic forecast for China in 2023 will be further revised upward. Harvey Zodin said that China’s “dual circulation” development pattern will make a difference, and suppressed demand will drive economic recovery. From the second quarter of this year, China’s economy will take off like a Long March rocket.
Currently, many countries and regions are deeply mired in energy crises, food crises, currency crises, and debt crises. In comparison, China’s economy has been tested for several years, and it has sufficient capacity and inherent needs to recover. Not only general consumption, but also various government policies will elastically promote economic recovery, such as real estate and the Internet.
In the foreseeable future, China’s significant contribution to the global economy will continue.