China’s economy took a positive turn after the government ended in December 2022 its zero-Covid policies, but economist Sara Hsu warns 2023 offers still many headwinds, she writes in Project Syndicate.
Sara Hsu:
In anticipation of this shortfall, export-oriented Chinese businesses have heartily embraced the end of zero-COVID by courting overseas export orders and foreign investment. But whether this additional marketing activity will offset slowing global demand remains to be seen.
Renewed stimulus may help. China is expected to roll out fiscal support for its semiconductor industry and for new technology infrastructure, and the government will be heavily promoting electric-vehicle purchases and tourism. In late 2022, the Ministry of Finance announced a commitment to supporting innovation and rural development through tax cuts and other stimulus measures, and the People’s Bank of China has signaled that it will continue to provide liquidity and allow for credit growth.
All told, China’s 2023 outlook is vastly different from that of 2022, owing to the change in its COVID policy. The economy is poised for a rebound in many critical areas. Barring some new disruption, that will help propel it past three years of economic pain and paralysis.
Sara Hsu is a speaker at the China Speakers Bureau. Do you need her at your meeting or conference? Do get in touch or fill in our speakers’ request form.
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