Signs point to stable growth in China in 2022, says top economist
Investment in infrastructure and manufacturing output will rise this year, just two of the factors that will keep China on track for economic growth in 2022.
That’s the view of Lian Ping, chief economist of Zhixin Investment and President of the China Chief Economist Forum. He added that retail sales of consumer goods are expected to return to the pre-Covid levels, and the country will also see growth in auto sales. Overall consumption is expected to grow by 7% year-on-year in China this year.
Lian told the China Daily website: “The job market remains stable, helping increase people’s disposable incomes. In the first three quarters of 2021, disposable income per capita in China increased by 9.7% year-on-year, which was up by 14.8% compared with the data in the first three quarters of 2019.”
He added: “China’s exports will continue to demonstrate strong resilience in 2022 despite a marginal slowdown in the growth rate. Europe and the United States will continue to show demand for Chinese products while ASEAN economies will show more demand for intermediate products amid their economic recovery. Foreign exchange rate developments and improved sea freight markets may stabilize exports. Therefore, China’s exports may grow by 10% year-on-year in 2022.
US trade relations ‘to improve’
He said: “China’s demand for imports will increase steadily in 2022. Demand for imported primary energy products and other bulk commodities will remain steady. Supplies of energy and primary products will be limited. Therefore, commodity prices will not fall back in the short term. Economic and trade relations between China and the US are likely to improve in 2022, which will lead to more US imports this year. Import growth is expected to slow to an annual growth rate of 9% this year.
“Fiscal policy will focus on ensuring stabilising incomes and the job market. Small, medium- and micro-sized enterprises will attract the most attention. Expenditures on education, social security, employment and medical care are expected to increase noticeably.”
He added that a new round of large-scale tax and fee reduction policies will likely be introduced this year to boost vitality in the real economy.
Lian concluded: “The target for China’s GDP growth should be set above 5% for 2022. China has set the long-term goal of doubling total economic output and income per capita in 2035. To achieve that goal, the country’s GDP growth rate should come in at 4.8% on average over the next 15 years to 2035. In light of the contracting demand, impact on supply chains and weakening expectations, it may be difficult for China to attain the 5% growth rate this year without more government support.”