Experts expect healthy, stable economic growth in China

Photo taken on Aug 15, 2021 shows a view of the Ningbo-Zhoushan Port in East China's Zhejiang province. - Xinhua

BEIJING (China Daily/Asia News Network): China has the conditions, confidence and capabilities to maintain stable, healthy and sustainable economic development this year, according to the country's top economic regulator.

While China is facing multiple pressures from shrinking demand, supply shock and weakening expectations, the National Development and Reform Commission said the country's economy has strong resilience and great potential, and the economic fundamentals will remain strong in the long term.

Experts expect that policymakers will take greater steps to shore up growth in early 2022. They said they believe that more policy easing is on the way, as the change in tone of top government officials and in policy statements emphasised the need to stabilize growth this year.

The NDRC said in an interview with Xinhua News Agency on Saturday that China made considerable progress in 2021, such as in substantial GDP growth and efforts to ensure stable supplies of energy and raw materials, laying a solid foundation for economic stability this year.

It also emphasised the need for combining cross-cyclical and countercyclical adjustments to stabilize the overall economy, saying China still has room for macro policy support and many policy tools in reserve to keep economic growth stable.

It said more efforts will be made to expand domestic demand, including unleashing the full potential of consumption, speeding up the construction of 102 key projects mapped out in the 14th Five-Year Plan (2021-25) and accelerating the construction of new infrastructure.

China's economy expanded 8.1 per cent year-on-year to 114.4 trillion yuan ($18 trillion) in 2021, with major indicators reaching targets, said the National Bureau of Statistics.

Tommy Wu, lead economist at the Oxford Economics think tank, said the 8.1 per cent GDP growth exceeded the 6 percent target for 2021, highlighting the strength of the initial stage of China's economic recovery from the COVID-19 pandemic.

"Overall, we forecast GDP growth will slow to 5 per cent this year," Wu said. "Policymakers have signalled front-loaded policy support.... Fiscal stimulus will likely take the form of infrastructure spending and tax cuts, while the People's Bank of China will maintain ample liquidity and robust credit growth."

Zhang Qiyao, chief strategist at Industrial Securities, said that overseas stock markets were generally strong when the A-share market closed for the Spring Festival holiday. The markets have assimilated the negative impact of the US Federal Reserve's interest rate hikes.

US-listed Chinese internet companies were quite bullish. Led by the rally of the technology sector, the Hang Seng Index in Hong Kong jumped 3.24 per cent to close at 24,573.29 points on Friday, the first trading day of Lunar New Year.

Such momentum is likely to be seen in the A-share market when it continues trading on Monday, he said.

Yang Delong, chief economist at First Seafront Fund, said the odds are high for the A-share market to pick up after the holiday in light of the rise in external markets.

Negative impacts such as economic downward pressure, the US Fed's interest rate hikes and the resurgence of Covid-19 in some parts of the world were all reflected in the A-share market slide before the Spring Festival holiday.