China set for steady growth despite tough global conditions

China has seen a steady economic recovery so far in 2013 despite the sluggish world economy, with growth expected to have accelerated in the second quarter from April–June, according to one of the country’s leading regulators.

Zhang Yuzhuo, chairman of the State-owned Assets Supervision and Administration Commission of the State Council, said there were positive signs for a strong recovery on both the supply and demand sides.

“We estimate that in the first half of this year, Q2 performance will be better than Q1,” Zhang said at the 14th Annual Meeting of the New Champions, also known as the Summer Davos Forum.

However, Zhang also warned about the challenges facing China’s economy, including the lower-than-expected growth in foreign trade.

He said more efforts should be made to generate growth in consumption, adding that emerging sectors should also be offered more support.

“It is our hope that through high-level forums, such as the Summer Davos Forum, we can build and maximize our consensus to deepen cooperation… so that we can collectively contribute to a global economic recovery,” Zhang said.

His views were echoed by Ngozi Okonjo-Iweala, director-general of the World Trade Organization, who called for more efforts to build global resilience, adding that fragmentation “will be costly for the world”.

She said: “If we decouple into two trading blocs, it will cost the world a 5% loss in global GDP in the longer term. The IMF estimates [the long-term cost of trade fragmentation could be as high as] 7%,” she told the forum.

“That’s like saying that we lose the equivalent of the whole economy of Japan, which will be catastrophic for the world. So, decoupling and fragmentation are something that the world simply cannot afford to have,” she added.

Okonjo-Iweala said World Bank research shows that the long-term growth potential of both developed and developing countries, as well as emerging market economies, is declining, and called for efforts to harness areas where there is productivity growth and where more youthful labour can help the global economy.

However, she still sees some opportunities in global trade including rapidly growing digitally delivered services and promising growth potential in green trade.

Fitch Ratings recently raised China’s 2023 GDP forecast from 5.2% to 5.6% after a swifter-than-expected reopening in the first quarter.

China’s GDP expanded 4.5% year-on-year in the first quarter, compared with an estimate of 2.8% in a report issued by Fitch Ratings in March.

“With consumption recovering and the drag from falling construction activity easing, domestic demand growth will pick up in 2023,” said Fitch Ratings.

 

China seeks to strengthen trade with New Zealand

China and New Zealand are looking to strengthen their free trade agreement, according to the country’s top commerce official.

During a meeting with Damien O’Connor, New Zealand’s Minister for Trade and Export Growth in Beijing, Chinese Commerce Minister Wang Wentao said China is keen to further strengthen co-operation with New Zealand under frameworks such as the World Trade Organization, the Asia-Pacific Economic Cooperation, the Regional Comprehensive Economic Partnership, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, and the Digital Economy Partnership Agreement.

According to a statement from China’s Ministry of Commerce after the meeting, the two sides “engaged in frank discussions, focusing on promoting bilateral economic and trade relations, as well as strengthening cooperation in regional and multilateral areas”.

New Zealand’s trade minister said that the country has maintained a long-standing and positive economic and trade co-operation with China. The trade structures of the two countries are highly complementary, and the bilateral free trade agreement has facilitated rapid growth in both export and import activities, he said.

He said New Zealand will continue to look to strengthen co-operation with China, particularly in agriculture and food security sectors. He added that New Zealand is looking to enhance communication and co-ordination with China in multilateral and regional way.