Analysts predict China will remain a steady and key driving factor of global economic growth in 2023, owing to its economy's durability and potential.
In the face of multiple challenges this year, China has maintained overall economic stability by effectively coordinating COVID-19 policy with economic and social development, and introducing a series of stimulus packages to support enterprises, stabilize consumer prices, and boost global investor confidence.
The annual Central Economic Work Conference, held in Beijing from Thursday to Friday, stated that China's economic performance in 2023 is likely to improve generally.
The Central Economic Work Conference, in elaborating fiscal and monetary, industrial, scientific and technology, and social policies for 2023, prioritized economic stability and required sustained progress while ensuring economic stability for the coming year.
According to a meeting called earlier this month by the Political Bureau of the Communist Party of China Central Committee, China has also vowed to significantly grow domestic demand and to fully play the fundamental function of consumption and the critical role of investment in 2023.
Given that Beijing has a plethora of policy levers at its disposal to ensure a resilient recovery, analysts believe that the Chinese economy will do well in 2023.
According to International Monetary Fund Managing Director Kristalina Georgieva, China has fiscal space to stimulate its economy and counteract downward pressure.
"We envisage three to four quarters of high growth, commencing either in the second or third quarter of next year," wrote analysts at international financial services business Societe Generale, forecasting the Chinese economy to rise by roughly 5% in 2023.
In a recent analysis, Morgan Stanley forecasted that China would mount a rebound beginning in mid-2023, with a full-year growth rate of 5%.
The analysts' optimism is based on a number of favorable signs and indicators.
"Chinese equities have climbed 37% since the beginning of November, after repeated positive reopening signals from Beijing," UBS analysts Christopher Swann and Vincent Heaney wrote in a research note on Monday.
Meanwhile, a slew of global corporations are growing their operations and investments in China. According to official figures, foreign direct investment in the Chinese mainland in actual use increased 17.4 percent year on year to 168.34 billion US dollars in the first ten months.
Among the heavyweight investors is Volkswagen, which announced investments of up to $3 billion in two new R&D-focused joint ventures in China in the second half of 2022 alone.
"The largest corporations that have invested billions of dollars into local assets are staying put and following through on their investment plans," Rhodium Group said in a research published Tuesday, underscoring investors' confidence in China's market prospects.
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