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

BEIJING, Feb. 2 (Xinhua) -- 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.

Tourists enjoy performance at the Qilou ancient street during the Spring Festival holiday in Haikou, south China's Hainan Province, Jan. 27, 2023. (Xinhua/Guo Cheng)

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.

A woman touches the screen to get tickets on a self-service machine at a cinema in Guiyang, southwest China's Guizhou Province, Jan. 29, 2023. (Xinhua/Tao Liang)

BRIGHT SPOT IN GLOBAL GROWTH

"The Chinese market will be the bright spot in global growth in the next two years," Tourk told Xinhua.

Tourk said, "China doesn't have this problem (of inflation). What we have here are productive workers coming back to work in factories. So they have a competitive advantage."

With a GDP of over 120 trillion yuan (17.9 trillion dollars), the most complete industrial system in the world, a high-quality infrastructure network and resilient industrial and supply chains, the Chinese economy enjoys a solid foundation to maintain sound and sustainable growth.

The global financial crisis in 2008 transformed China into the engine of the global economy, said Rashid, adding that the country is expected to become the engine of the world economy once again.

"China can play a significant role in stimulating" global growth in 2023, said the economist.

The international media is jumping on the bandwagon of China's growth prospects for 2023 and beyond.

The outlook for the global economy is growing slightly brighter after China optimized its COVID response, the Associated Press said in a recent report.

The world's second largest economy will be back in force from mid-2023, the Wall Street Journal has reported, citing Morgan Stanley. China's economic growth will contribute a quarter of global growth, according to Morgan Stanley's chief China economist.

Some formerly bearish investors and strategists have turned positive on Chinese stocks in recent months, according to the Wall Street Journal.

People work at an intelligent plant for manufacturing the FAW Jiefang J7 trucks in Changchun, northeast China's Jilin Province, Jan. 31, 2023. (Xinhua/Xu Chang)

BUSINESSES GET ENTHUSED

Robust growth of the Chinese economy means good news for businesses worldwide.

Manufacturers, retailers and hospitality operators are enthused by the positive consumer response to the recent holiday celebrations, Bobby Verghese, consumer analyst at data analytics and consulting company GlobalData, has told Xinhua.

"The global consumer goods industry has its eyes on the Chinese Spring Festival 2023, the acid test for the Chinese consumption engine," said Verghese.

The analyst noted that multinational and regional companies have rolled out customized offerings for Chinese customers. "Luxury brands and service providers are at the forefront, tapping the resumption of travel and tourism, outdoor dining, and gifting activities," Verghese said.

In recent decades, China has evolved into a global economic leader in terms of consumption, trade and investments, investment banking company UBS has said in a recent report.

The country has played a meaningful role as a global growth engine, benefiting Chinese companies and its people and many other developing and developed markets, it added.

"Hundreds of U.S. companies across multiple industries are eager to expand their businesses in the Chinese market," said Craig Allen, president of the U.S.-China Business Council.

Allen expected China's economy to register a higher growth rate in the first half of this year compared to the latter half of 2022 due to vibrant domestic demand during the Spring Festival holiday season.

Ready-to-go tourists from China are boosting the confidence of tourism operators around the world.

Millions of tourists from China will return to the world stage, raising hopes of a rebound for the global hospitality industry, CNN has reported.

Irfan Karsli, head of the Istanbul-based Ligarba travel agency, told Xinhua, "Tourism representatives look forward to the arrival of Chinese tourists."