Editor's note: John Ross is a senior fellow at the Chongyang Institute for Financial Studies, Renmin University of China. The article reflects the author's opinions and not necessarily the views of CGTN. 

The conclusion of the year end report of 2022 is crucial to make an economic balance sheet for both the preceding period, along with perspectives for 2023. The data is available for most of the year, as opposed to media speculation, which discloses the relative performance of major economies. 

China has made a major policy change to deal with COVID, which makes this a suitable point to compare economic performance during the pandemic period. Both measures show that China's economy had outperformed the U.S. and Europe during the COVID-19 pandemic and will continue on for next year. China's outperformance could increase in 2023.

This has significant international economic repercussions since China's growth during periods of an economic downturn in the U.S. and Europe has in the last decades been the chief counter-cyclical stabilizer of the global economy.

Starting with data, which is already submitted, during the pandemic China's economy outgrew both the U.S. and Europe. For the third quarter of 2022, China's GDP (gross domestic product) rate has increased by 3.9 percent, quarter-on-quarter, while the U.S. rose by 2.6 percent, and eurozone by 0.3 percent. This confirms, as was also shown during the international financial crisis, that China's anti-crisis economic capacities are much stronger than the U.S. and Europe.

Apparently, the Western media claimed China's economy was crippled by its COVID-19 policies, while the U.S. and Europe's response was better from an economic viewpoint. Nonetheless, China still outperformed them.

Turning to the most recent period, and perspectives for 2023, economic outperformance by China would continue. During 2022 the U.S. and Europe experienced the most severe "stagflation" that is the combination of slow growth and high price rises, for almost half a century. Inflation reached its highest level in the U.S. and Europe for 40 years, while simultaneously economic growth has fallen by more than half during the same period. 

Inflationary pressures still exist leading to negative consequences for economic growth. Although U.S. inflation has declined from its peak of 9.1 percent in June to 7.1 percent in November this remains the highest for four decades. In attempts to reduce inflation to more acceptable levels, the U.S. Federal Reserve stands set to raise benchmark rates higher for next year – the only issue is by how much. Accordingly, U.S. money supply is falling – an extremely infrequent trend exerting negative pressure on economic growth.

The Federal Reserve monetary policy is one of the reasons why, despite the current unfavorable economic situation in the U.S. and Europe, the IMF projects that these economies slowdown will worsen in 2023. The IMF's latest World Economic Outlook projects that U.S. economic growth will fall from 1.6 percent in 2022 to 1.0 percent in 2023, while EU GDP growth will contract from 3.2 percent to 0.6 percent.

In contrast, China did not suffer stagflation in 2022. Economic growth for the first three quarters of the year was 3 percent and by the third quarter of its year-on-year GDP growth rate was 3.9 percent – compared to 2.3 percent in the eurozone and 1.9 percent in the U.S. China's November inflation was 1.6 percent compared to the U.S. at 7.1 percent and the eurozone's 10.1 percent.

As inflation in China remains under control, it is under no pressure to undertake interest rate rises or other restrictive measures to control it. More room exists for enacting reasonable stimulus measures. China's economy could accelerate from the 3.9 percent seen in the third quarter – and the IMF was already forecasting that China's economy would rise in 2023, compared to 2022, whereas the U.S. and Europe would decelerate.

The balance sheet of the pandemic period and prospects for 2023 are clear. In terms of health concerns, China has outperformed both the U.S. and Europe during COVID-19. The deaths from COVID-19 in Chinese mainland were under 5,500 while the U.S. suffered 1.1 million deaths and about 2.1 million in Europe.

The Western media claimed that China's far superior health performance during the pandemic came at the cost of dismal economic performance, but that's false. China's economy outperformed the U.S. and Europe during the pandemic, including in 2022. Current trends indicate that China's economic growth forecast for 2023 could expand even more. China's economy will remain the key "stabilizer" of the world economy.

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