China Economic Observer Sheds Spotlight on Economic Outlook and Two Sessions’ Reports
Mar 27-2023
On March 22, China Economic Observer (CEO) held its 64th edition in Cheng Ze Garden, comprising thematic speeches and a Q&A session. Since its launch by the NSD in 2005, the forum has hosted discussions on major reform topics, economic trends, and investment policies.
Prof. Justin Lin Yifu, Honorary Dean of the NSD and Dean of both Institute of New Structural Economics and Institute of South-South Cooperation and Development, spoke on the Chinese economy’s new journey, new challenges, and new reforms. Referring to some important agendas of the Two Sessions, he expounded on the logic and significance of the 5% growth target, saying that it leans to the conservative side but is reasonable in the sense that it offers some governance leeway for the new leadership while factoring in external uncertainties such as the Russia-Ukraine war, geopolitics, and international financial crisis. China possesses a multitude of advantages in its pursuit of high-quality growth, not least its population quality dividend and large market size, so it still holds the potential to grow by 8% annually up to 2035. Overall, Prof. Lin believed that China is fully likely to achieve 6% growth in 2023.
Prof. Yao Yang, Dean of both NSD and BiMBA Business School, and Executive Dean of Institute of South-South Cooperation and Development, said that from a growth perspective, the first ten years of the current millennium was a golden age as the average growth rate topped two digits; however, from the perspective of technological cycle, the Chinese economy has entered a new golden era. Though in 2023 the developed countries might fall into a light recession and the technological de-coupling between the US and China might escalate, Prof. Yao advised the audience to keep their confidence because China is likely to lead in some technologies like electric cars and chips, making it possible to pull ahead by switching to new lanes; nor should the impact of the developed countries’ financial crisis and choke-throat technological ban be overestimated, for China has a relatively strong buffer and an expansive space for development. He also noted other positive factors: throughtout 2023, investment is expected to contribute 2% of GDP growth, the real estate market will stop sliding, and consumption might contribute 3% of GDP growth.
Wang Min, Associate Professor of NSD and Deputy Director of PKU China Center for Environment and Energy Economics, dissected the relations between industrial structural transformation and green development. He pointed out that to achieve the Double Carbon targets doesn’t necessitate efforts at all costs; instead, by respecting economic development and market patterns, it is possible to achieve both low carbon and economic growth at lowest possible costs. The industrial share of China’s GDP peaked out in 2012 and declined to 31% in 2020 – a journey that developed countries took 30 years to traverse – resulting in less pressure on the environment. A similar development pattern is occurring in urbanization, said Prof. Wang, adding that some big emitters like steel, cement, and transport will undergo drastic and irreversible decrease in demand. He called for market-based measures, not government-directed campaigns, to cut down on emissions.
Zhao Bo, Associate Professor of NSD, shared his outlook on the Chinese economy in 2003 by summing up its five note-worthy features: the driving force of technology and innovation, especially for manufacturing and service sectors; tighter combination of finance and the real economy, particularly in the area of financing support for private firms; further expansion of division of work in global trade; stability in economic policy as the government will go to lengths to reduce uncertainty; and further improvement to the social security system.
