China’s economy, the second largest in the world, has always been in the spotlight. Recently, the country has deployed its economic work for 2023, opening a new chapter for its economic development and filling us with confidence in China’s economy in the new year.
Looking at the bigger picture, the 10 new prevention and control measures ushered in a new stage of China’s COVID-19 response. Although the pandemic has not yet come to an end, the optimized strategy will undoubtedly boost economic activity, and facilitate the flow of economic factors and commodities. Put simply, the optimized strategy has reinvigorated the economy. The roads are busier, the malls have more shoppers, and travel apps have seen an uptick in customers. The optimized COVID-19 strategy and updated economic policy have brought China’s economy into a new development stage.
In terms of specific economic measures, “expanding domestic demand” has become a top priority in achieving the goal of ensuring stable growth in 2023. Predictions for this year depict a bleak global economic outlook with sluggish external demand. In contrast with the Keynesian belief that “demand creates its own supply,” China emphasizes generating effective demand through high-quality supply, which means continuously innovating to create higher-level products. For example, despite the saturated cellphone market, the emergence of smartphones redefined cellphones, creating demand from 7 billion people for the new products. This represents the underlying logic behind China’s efforts to deepen supply-side structural reform.
According to a recent report from the World Bank, China contributed an average of 38.6% to global economic growth from 2013 to 2021, more than the G7 countries combined. Expanding domestic demand means further tapping the huge potential of China’s supersized market of 1.4 billion people. This will translate into a critical driving force to the economies of both China and the world.
In addition, developing the private sector is also a key priority. With private businesses, such as Huawei, Alibaba and ByteDance, accounting for a large proportion of China’s economy, the private sector has now become a major economic player in the country. Statistics show that in the first 11 months of 2022, the import and export volume of China’s private businesses amounted to 19.41 trillion yuan (about $2.82 trillion), or 50.6% of the country’s total. Private businesses have also demonstrated stronger vitality and resilience, especially in terms of the sustainable development of new forms of foreign trade.
Therefore, China is scaling up its support for the private sector, continuously urging equal treatment of private businesses and their state-owned counterparts, and helping micro-, small- and medium-sized enterprises to overcome difficulties posed by the pandemic. These supporting measures aim to promote the sound development of private businesses. Likewise, the thriving of private businesses will in return bolster the economy by creating more jobs, ensuring the continued growth of disposable incomes, and further expanding domestic demand and boosting consumption. As such, we are also confident about the growth of the private sector in 2023.
China’s economy has withstood multiple tests and challenges during the three years since the outbreak of the pandemic, and the year 2023 is bound to be a brand-new journey in striving for economic growth. However, with the current policies, innovation capacity and various driving forces, we are confident that China’s economy will grow steadily, continue to act as an engine for the global economy and propel further growth.
(Special thanks to Mr. Yu Miaojie, President of Liaoning University, and a member of the Economic and Trade Policy Advisory Committee of the Ministry of Commerce)