Good start to Chinese economy in 2023 poised to stimulate global growth

Encouraging indicators ranging from tourism and box office revenues to the purchasing managers' index at the onset of 2023 are bolstering forecasts of a faster-than-expected recovery of China's economy and global growth.

The International Monetary Fund (IMF) on Monday lifted its forecast for China's economic growth in 2023 to 5.2 percent from a previous prediction of 4.4 percent. Investment banks, including Morgan Stanley and Goldman Sachs, have also revised their growth forecasts for the world's second largest economy.

Economists and media worldwide share the view that thanks to sound fundamentals and effective macro policies, China's economy will speed up after the country adjusted its COVID response measures, thus offering much-needed help to the global economy. 

FASTER-THAN-EXPECTED RECOVERY

In its latest update to the World Economic Outlook report, the IMF expects a "faster-than-expected recovery" of China's economy after the COVID-19 pandemic dampened growth in 2022.

"Growth is expected to pick up in China with the full reopening in 2023," it said.

Robust tourism activities and a consumption boom during the Spring Festival have showcased the dynamism of China's economy and provided evidence for the rosy predictions.

In the weeklong holiday, China saw nearly 2.9 million cross-border trips, up 120.5 percent year on year, and 308 million domestic trips, up 23.1 percent. Box office nationwide raked in 6.76 billion yuan (1 billion dollars), the second-highest figure for the annual holiday.

Meantime, the purchasing managers' index for China's manufacturing sector came in at 50.1 in January, returning to expansion after three consecutive months of contraction.

"I think all the ingredients for recovery are there. We are very optimistic about recovery in China," said Hamid Rashid, a leading United Nations economist and lead author of the World Economic Situation and Prospects 2023.

Rashid expressed confidence that China's economy will experience a "robust recovery" in 2023 as fiscal policy and monetary policies are aligned correctly.

The economist added that China's economy has a favorable condition to grow as the country's inflation rate has been low, which is an exceptional advantage.

Sharing a similar view, Khairy Tourk, professor of economics with the Stuart School of Business at the Illinois Institute of Technology in Chicago, the United States, also sees momentum in the Chinese economy.

"Only China is the country that will continue to be a major engine of global growth," said Tourk, citing the advantages of the country's first-class infrastructure, high-quality workforce and huge market.