RIYADH: The Chinese economy is expected to rebound strongly in the second quarter of this year, and will mark an overall annual growth of over 5 percent in 2023, thus meeting the set target, according to Li Qiang, the country’s premier.
Speaking to delegates at the World Economic Forum in Tianjin on Tuesday, Li said that the Chinese government will launch various initiatives to promote the coordinated expansion of the country’s economy.
“We will launch more practical and effective measures in expanding the potential of domestic demand, activating market vitality, promoting coordinated development, accelerating green transition, and promoting high-level opening to the outside world,” said Li.
Last week, China cut two benchmark lending rates — its one-year loan prime rate and the five-year LPR — by 10 basis points each.
The rate reductions follow recent economic data that showed China’s retail and factory sectors are struggling to sustain the momentum seen earlier this year.
In the first quarter of 2023, China’s gross domestic product grew 4.5 percent, while in 2022 the GDP growth of the Asian giant amounted to 2.99 percent.
Li added that the trend of globalization still remains intact, and China is open to new businesses and foreign investors.
“We should follow the trend of the times, further develop consensus and unswervingly build an open world economy,” he said.
Despite economic rebound projections by Chinese leaders, credit rating agency S&P Global, on June 25, cut its forecast for China’s economic growth this year to 5.2 percent, down from an earlier estimate of 5.5 percent.
“China’s key downside growth risk is that its recovery loses more steam amid weak confidence among consumers and in the housing market,” S&P said in a statement.
According to S&P Global, the most effective measures to bolster China’s economy in 2023 include easing housing purchasing restrictions and mortgage down-payment requirements, along with expanding credit and infrastructure financing and fiscal support for consumption.
Earlier in June, Goldman Sachs also trimmed down its forecasts for China’s economic growth.
The US investment bank cut Chinese economic growth from 6 percent to 5.4 percent this year, while it also lowered its 2024 growth forecast from 4.6 percent to 4.5 percent.
“We judge that growth headwinds are likely persistent while policymakers are constrained by economic and political considerations in delivering meaningful stimulus,” said Goldman Sachs analysts headed by economist Hui Shan.
