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China’s GDP Expected to Grow by 5-5.5% in 2022

Mar 15-2022   



Due to pressure on three fronts, China might achieve GDP growth of 5-5.5% in 2022, said Mr. Xu Xianchun, a research fellow with the NSD and former Deputy Director of National Bureau of Statistics, in a media interview prior to the Two Sessions (the National People’s Congress and the Chinese People’s Political Consultative Conference).

 

In 2021, the Chinese economy grew by 8.1%, significantly higher than the target of 6%, thanks to multiple factors at work. However, it would be rather hard to achieve 6% growth in 2022 as demand might contract, supply might be disrupted, and expectations might weaken – three constraints that had been identified by the Central Economic Working Conference late last year.

 

Mr. Xu expected the Chinese GDP to grow by 4.5-5% in the first two quarters of 2022, 5.5% in the third and 6% in the fourth. The Tertiary Industry would continue to be an important driving force. In particular, information transmission, software, and technology could be expected to sustain a high growth rate in added value. Meanwhile, sectors such as wholesale and retail, transportation, warehousing and postal service were yet to return to pre-pandemic growth level and thus still had some room for development.

 

As for weakening expectations, which reflected the lack of confidence on the part of both enterprises and consumers due to structural issues and short-term uncertainties, Mr. Xu advised adopting a series of measures to ensure continuous recovery in residents’ incomes and optimizing resource allocations and accelerating China’s own R&D to enhance the competitiveness of its manufacturing sector.

 

He also stressed the need for a mental shift by acknowledging that the high-growth model over the last three decades, which had been highly dependent on natural resources and cheap labor, would be unviable now. By lowering the expectation for economic growth target, the priority could be placed on the quality of development.

China’s GDP Expected to Grow by 5-5.5% in 2022

Mar 15-2022   



Due to pressure on three fronts, China might achieve GDP growth of 5-5.5% in 2022, said Mr. Xu Xianchun, a research fellow with the NSD and former Deputy Director of National Bureau of Statistics, in a media interview prior to the Two Sessions (the National People’s Congress and the Chinese People’s Political Consultative Conference).

 

In 2021, the Chinese economy grew by 8.1%, significantly higher than the target of 6%, thanks to multiple factors at work. However, it would be rather hard to achieve 6% growth in 2022 as demand might contract, supply might be disrupted, and expectations might weaken – three constraints that had been identified by the Central Economic Working Conference late last year.

 

Mr. Xu expected the Chinese GDP to grow by 4.5-5% in the first two quarters of 2022, 5.5% in the third and 6% in the fourth. The Tertiary Industry would continue to be an important driving force. In particular, information transmission, software, and technology could be expected to sustain a high growth rate in added value. Meanwhile, sectors such as wholesale and retail, transportation, warehousing and postal service were yet to return to pre-pandemic growth level and thus still had some room for development.

 

As for weakening expectations, which reflected the lack of confidence on the part of both enterprises and consumers due to structural issues and short-term uncertainties, Mr. Xu advised adopting a series of measures to ensure continuous recovery in residents’ incomes and optimizing resource allocations and accelerating China’s own R&D to enhance the competitiveness of its manufacturing sector.

 

He also stressed the need for a mental shift by acknowledging that the high-growth model over the last three decades, which had been highly dependent on natural resources and cheap labor, would be unviable now. By lowering the expectation for economic growth target, the priority could be placed on the quality of development.