The economy of the People’s Republic of China is steadily recovering after the pandemic and remains strong, instilling confidence in its economic future, according to a United Nations economist.
The United Nations on Tuesday (May 16) released a mid-year update of its World Economic Situation and Prospects 2023 report, which projected China’s economy will grow 5.3 percent this year, up from the 4.8 percent forecast in January.
One factor behind the upward revision of China’s growth is that there has been a strong rebound in retail sales that reflects strong household demand, Hamid Rashid, lead author of the mid-year report, told Xinhua in an interview.
Listing two other factors, he said that China’s housing market has stabilised to a large extent. Unlike many other major economies, China has significant fiscal and monetary space available to support economic activities.
“The Chinese economy is on a very strong footing” compared to others, despite some downside risks, said Rashid, chief of the global economic monitoring branch, economic analysis and policy division at the UN Department of Economic and Social Affairs.
He pointed out that one of the risks is weak external demand if countries such as the United States and Europe go into recession or a prolonged period of slow growth, which may affect China’s growth beyond 2023.
“But the good news for China is that whenever you see that kind of downward pressure, the fiscal and monetary side can … support it and to prop up economic activities,” Rashid said.
The Chinese economy has been in excellent standing, and “we are confident about China’s near-term economic prospects,” he said.
He said that if the current policy mix is maintained and external conditions do not deter it further, “China will be able to maintain its growth trajectory.”
China’s economic recovery positively impacts many developing nations by increasing export demand. It is also good news for the countries that rely on Chinese tourism. Developed economies stand to benefit because China is a major importer of technology, said the economist.
As the second-largest economy in the world, China has been playing a constructive role in the global economy by being a multilateral player. He said that with China’s recovery, international trade would likely recover faster.