Building confidence: A pedestrian walking near a residential construction project in Beijing. High-level household savings and the recent recovery in consumption will contribute to an active growth rebound, says Yao. — Bloomberg
BEIJING: Real estate recovery is a key factor to China’s economic rebound this year and should be closely monitored while growth driven by foreign trade, particularly exports, is likely to dim, says an economist.
Yao Yang, dean of the National School of Development at Peking University, said in a recent seminar that he expects China’s 2023 gross domestic product to achieve growth between 5.3% and 5.8%, with consumption playing a notable role.
Yao said the growth target of around 5% this year in the recently unveiled government work report leaves greater room for macro policy manoeuvres, making the goal more attainable.
“There are many current conditions that are conducive to a robust economic recovery. For instance, the unleashing of pent-up demand will actively drive consumption recovery.
“High-level household savings accumulated during the years under Covid-19 and the recent recovery in consumption will . contribute to an active growth rebound,” he said.
How well the real estate sector will recover is a key variable for this year’s growth, Yao said, given that the sector remained largely stagnant last year with declining investment.
“It’s critically important for the sector to grow in a stable manner and hold up the downward pressure from last year,” Yao said,
“The real estate sector, as one of China’s pillar industries, plays a critical role in expanding consumption as it also catalyses consumption in home decorating and refurbishing.”
“The good thing is that so far, transactions of secondhand homes have picked up and housing prices in several cities have recovered. Home buyers are regaining confidence,” he said.
On the ongoing regional geopolitical tensions and the closely watched development of Sino-US ties in trade and economy, Yao said competition between the two largest world economies “does not have to be a zero-sum game”. — China Daily/ANN
