China's economic resilience injects confidence into global growth
Updated 10:43, 07-Feb-2023
Lu Kang
China's economic resilience injects confidence into global growth

China's economic resilience injects confidence into global growth.mp3


Editor's note: Decision Makers is a global platform for influential leaders to share their insights on events shaping today's world. Lu Kang is the ambassador of the People's Republic of China to the Republic of Indonesia. The article reflects the author's opinions and not necessarily the views of CGTN.

China's economy: rapid and strong development 

The world is undergoing once-in-a-century changes and COVID-19 pandemic amid a turbulent geopolitical situation, as well as serious disruptions to supply chains and surging inflation rates. The world economy is struggling with sluggish growth. According to the World Bank's latest Global Economic Prospects, the global economy is projected to rise by 1.7 percent in 2023 and 2.7 percent in 2024. Forecasts for 2023 are revised down for 95 percent of advanced economies and nearly 70 percent of emerging markets and developing economies.

Meanwhile, there remain bright spots in an increasingly uncertain world economic outlook. The new Organization for Economic Co-operation and Development (OECD) Economic Outlook forecasts that the United States and Europe are slowing sharply, and the major Asian emerging-market economies are expected to account for close to three-quarters of global GDP growth in 2023, which will be the main engine of global growth in 2023 and 2024. According to the World Bank, economic growth in Asia-Pacific will rise to 4.3 percent in 2023 and 4.9 percent in 2024.

In particular, as the second-largest economy and the biggest developing country, the World Bank predicts that China's economic growth is expected to reach 4.3 percent in 2023 and 5.0 percent in 2024. The United Nations explained the prediction in its World Economic Situation and Prospects 2023, which is on account of the Chinese Government optimizing COVID-19 prevention policies and adopting more favorable economic measures, such as boosting domestic consumer demand. China's economic growth is expected to accelerate in 2023, which will drive regional economic growth. The international community is looking to a stable and growing Chinese economy support the global recovery. 

China's economy: steady and sustainable growth

As the largest developing country with a population of more than 1.4 billion, China has managed its own development in the past decade, while undertaking various risks and challenges, so as to gain the edge and embrace the future. Despite some adverse factors, China maintains positive economic growth, with an average annual rate of 4.5 percent over the past three years. The growth rate is not low, though understandably lower than before. The economic aggregate and per capita GDP continue to rise.

In 2022, the 20th National Congress of the Communist Party of China (CPC) was held. The congress has drawn up a grand blueprint for China's development in the coming five years and beyond. Last December, China held the annual Central Economic Work Conference to make plans for 2023. The country will adhere to progress while maintaining stability, to support proactive fiscal and prudent monetary policies. China will keep overall stability in prices and employment.

China is fostering a new development paradigm with domestic circulation as the mainstay and domestic and international circulations mutually reinforcing, in order to expand internal consumption; improve industrial systems; and re-balance the economy. A well-functioned domestic circulation relies on strengthening the international division of labor and expanding foreign trade and utilizing foreign investment.

Opening-up, as China's basic state policy, is a catalyst of reform and development. China will continue to open-up to the outside world, which would usher in greater opportunities for global development.

China-Indonesia economic cooperation: promising prospects

As the largest economy in the Association of Southeast Asian Nations, Indonesia's economy continues to recover. According to the OECD, favorable commodity prices and still buoyant capital inflows are helping Indonesia to resist strong global headwinds. Indonesia's GDP growth is projected to average around 5 percent in 2023 and strengthen slightly in 2024. 

The newly set-up logo of the Association of Southeast Asian Nations in Jakarta, capital of Indonesia, as the country officially assumes the group's chairmanship, January 29, 2023. /CFP
The newly set-up logo of the Association of Southeast Asian Nations in Jakarta, capital of Indonesia, as the country officially assumes the group's chairmanship, January 29, 2023. /CFP

The newly set-up logo of the Association of Southeast Asian Nations in Jakarta, capital of Indonesia, as the country officially assumes the group's chairmanship, January 29, 2023. /CFP

China and Indonesia, both major developing countries and emerging economies, are crucial economic and trade partners, with strong economic complementarity and deep integration of industrial and supply chains. The bilateral trade volume in 2022 amounted to $149 billion, a year-on-year increase of 19.8 percent. China remains Indonesia's largest trading partner, source of import and export markets.

In meeting Indonesia's needs for industrialization, infrastructure, industrial upgrading and digital economy, we have witnessed China's investment in the country. China has been among the top three foreign investors in Indonesia for many years successively. Indonesia has long been one of the top 10 overseas markets for Chinese enterprises undertaking project contracting.

On January 2, 2023, the Regional Comprehensive Economic Partnership (RCEP) entered into force for Indonesia. Once the agreement is effective, the tariffs on many commodities will be exempted, bringing greater benefits for foreign trade companies. The RCEP goes beyond tariff reductions. It brings certainty and openness to trade services, standards, investment, e-commerce, movement of natural persons, sanitary and phytosanitary rules, and technical cooperation. The RCEP will provide confidence to stakeholders, especially enterprises, and inject new impetus into regional economic integration and regional and global economic growth.

2023 marks the 10th anniversary of the establishment of the China-Indonesia Comprehensive Strategic Partnership, and the proposal of the "21st-century Maritime Silk Road" by President Xi Jinping in Indonesia. Over the years, the Belt and Road Initiative has synergized Indonesia's Global Maritime Fulcrum. Bilateral economic and trade cooperation has been enhanced. Flagship projects such as the Jakarta-Bandung High-speed Railway, the Regional Comprehensive Economic Corridor and "Two Countries, Twin Parks" will boost industrial development in both countries and promote deeper integration of supply and industrial chains.

The two growing economies will expand economic and trade cooperation, to promote domestic industrial development, elevate respective stand in the global industrial chain, mitigate the negative impact of COVID-19 and play larger roles in the global recovery.

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