China's economy has secured positive growth against all the odds over the past three years thanks to a slew of pro-growth measures to weather COVID-19, and its GDP is expected to exceed 120 trillion yuan (about $18 trillion) in 2022, showing strong resilience amid global headwinds.

The economy saw a V-shaped recovery between 2019 and 2021. In 2020, China was the only major economy to achieve positive growth. In 2021, its GDP contributed over 30 percent to world economic growth. In 2022, the economy remained the second largest in the world.

Stable inflation despite global price hikes

The country's inflation rate has remained generally stable during the COVID-19 pandemic despite bulk commodity price hikes in the international market.

China's inflation rate was 0.9 percent in 2021, and is expected to remain relatively subdued at 2.2 percent in 2022, according to the International Monetary Fund (IMF). In contrast, global inflation is forecast to rise from 4.7 percent in 2021 to 8.8 percent in 2022, IMF said in October.

China's central bank is the only of its kind in the world that is not hiking interest rates aggressively to curb inflation, according to Jean Chia, chief investment officer at Bank of Singapore.

Resilient foreign trade despite global woes

With a solid industrial foundation and a series of policies to ensure supply, China's foreign trade in goods has maintained a relatively high growth in the past three years, which has effectively alleviated the pressure on the global supply chain arising from the COVID-19 pandemic.

China has become the major trading partner of more than 140 countries and regions. The country's foreign trade in goods ranks first in the world. In 2021, its foreign trade volume surpassed the $6 trillion mark for the first time.

Safe haven despite global gloomy investor sentiment

The country has also become a safe haven for foreign investors and is leading the world in foreign capital inflows. Its capital inflows continue to grow steadily amid the COVID-19 pandemic despite the global gloomy investor sentiment.

Global foreign direct investment (FDI) shrank by 42 percent in 2020 due to the impact of the COVID-19 pandemic, while FDI inflow into China achieved a 4.5-percent growth against the downward trend. 

Tax and fee cuts to ease burden on businesses

China has continuously cut taxes and fees to ease the burden on businesses to stabilize the economy. In 2022, about 2.4 trillion yuan worth of value-added tax credits were refunded to taxpayers' accounts, which was the largest refund in history.

Thanks to supportive tax and fee policies adopted by the government, over 80 percent of the country's privately or individually-owned businesses do not need to pay taxes, and the average tax paid monthly by eligible businesses in 2022 is 40 percent lower than that of 2019.

Private sector helps boost virus-hit economy

China's top leaders have pledged unwavering support for the private sector, as the fast-growing private sector has played a big role in creating new jobs, promoting technological innovations and stabilizing economic growth.

The private economy has continued to see strong growth despite challenges posed by COVID-19. From January 2020 to August 2022, the number of Chinese private enterprises expanded from 35.2 million to 47.0 million. In 2021, they accounted for 92.1 percent of all enterprises.

In 2021, the private sector contributed 48.6 percent of foreign trade, 56.5 percent of fixed-asset investment, 59.6 percent of tax revenue, over 60 percent of GDP, over 70 percent of technological innovations and more than 80 percent of urban employment.

As the risks of global economic stagflation and recession are rising in 2023, headwinds are obvious for China. However, the country has enormous potential, strong resilience and vast room to maneuver, and the fundamentals of the Chinese economy remain unchanged.

Data editor: Yao Nian; 

Graphics designer: Mukesh Mohanan