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Prof. Lu Feng: China Will Fuel Global Economic Expansion in 2023

Feb 04-2023   



On January 30, the IMF revised upward the 2023 growth rates of the world economy and the Chinese one, to 2.9% and 5.2% respectively, which are 0.2% and 0.8% higher than its initial estimates in October 2022. In a media interview, Prof. Lu Feng of the NSD commented that the lifting of pandemic controls will lead to an additional 2% expansion of the Chinese economy, which largely explains the jump in the global economy.

 

He said that the Chinese economy typically provides about 30% of the growth rate of the world economy; which means the 0.8% upward revision for China can be translated to a 0.24% boost to the global economy, higher than the 2% set out by the IMF.

 

The underestimates in 2022 might be due to the incapability of foreign researchers in grasping the underlying reasons for China’s economic challenges last year and the shifting mechanism this year. The median growth rate of the Chinese economy in 2023, based on estimates of Chinese scholars, is 5%, a figure that American experts found incomprehensible, Prof. Lu discovered through a visit to the US in early 2023.

 

Many positive elements are in place to jolt the Chinese economy into a much stronger performance than last year, said Prof. Lu. Chief among them is the adjustment of pandemic measures, along with optimization of policies concerning the real estate industry and the platform economy, said Prof. Lu.

 

The constraints are not to be neglected, he pointed out. The dire shape of the balance sheets of many SMEs and households is likely to dampen consumption recovery. In addition, economic recessions in other countries might reduce the demand for Chinese exports, which amounted to 1.3% of China’s GDP growth over the last three years. To make up for the drop in exports, domestic consumption will have to increase by 6.5% for the economy to achieve 5% growth in 2023.

Prof. Lu Feng: China Will Fuel Global Economic Expansion in 2023

Feb 04-2023   



On January 30, the IMF revised upward the 2023 growth rates of the world economy and the Chinese one, to 2.9% and 5.2% respectively, which are 0.2% and 0.8% higher than its initial estimates in October 2022. In a media interview, Prof. Lu Feng of the NSD commented that the lifting of pandemic controls will lead to an additional 2% expansion of the Chinese economy, which largely explains the jump in the global economy.

 

He said that the Chinese economy typically provides about 30% of the growth rate of the world economy; which means the 0.8% upward revision for China can be translated to a 0.24% boost to the global economy, higher than the 2% set out by the IMF.

 

The underestimates in 2022 might be due to the incapability of foreign researchers in grasping the underlying reasons for China’s economic challenges last year and the shifting mechanism this year. The median growth rate of the Chinese economy in 2023, based on estimates of Chinese scholars, is 5%, a figure that American experts found incomprehensible, Prof. Lu discovered through a visit to the US in early 2023.

 

Many positive elements are in place to jolt the Chinese economy into a much stronger performance than last year, said Prof. Lu. Chief among them is the adjustment of pandemic measures, along with optimization of policies concerning the real estate industry and the platform economy, said Prof. Lu.

 

The constraints are not to be neglected, he pointed out. The dire shape of the balance sheets of many SMEs and households is likely to dampen consumption recovery. In addition, economic recessions in other countries might reduce the demand for Chinese exports, which amounted to 1.3% of China’s GDP growth over the last three years. To make up for the drop in exports, domestic consumption will have to increase by 6.5% for the economy to achieve 5% growth in 2023.