October 30, 2023
BEIJING – China is projected to contribute more than 30 percent of global economic growth in 2023, highlighting the anchoring role of the world’s second-largest economy in a more vulnerable world, leading experts said at a forum on Saturday.
Kristalina Georgieva, managing director of the International Monetary Fund, said the world has become more shock-prone after three years of COVID-19, conflicts and worsening climate disasters.
The good news is that the world economy has shown resilience, with Asia faring better than other regions. Specifically, China alone is projected to contribute more than 30 percent of global growth this year, Georgieva said via video at the International Finance Forum (IFF) 20th Anniversary and Annual Meeting 2023 on Saturday.
She added that macroeconomic policies have been appropriate as a whole in China, though there is still room to re-orient public spending towards social protection and a need to expedite market-based restructuring of troubled real estate developers.
Han Seung-soo, co-chairman of the IFF and former prime minister of the Republic of Korea, also said China’s robust growth and financial stability are very critical for the global community at a juncture where higher or more persistent global inflation could trigger a sharp repricing of financial assets and potentially precipitate a crisis.
Han said that the recent recalibrations in policy focus by the Chinese government is a substantive response to the economic and financial challenges related to property market adjustments.
The IFF Global Finance and Development Report 2023, released during the meeting, predicts that China’s economy will grow 5.2 percent in 2023 and 5 percent in 2024 as the government is expected to further take actions to ensure the orderly resolution of debt problems of some large property developers and the sustainability of local government finance. Monetary and fiscal policies will continue to support recovery as well.
Meanwhile, the global economy is projected to grow 3.1 percent both this year and next, when tight monetary policy and financial conditions are set to continue.
Warning of the global debt and financial risks brought by a higher-for-longer interest rate environment, Zhou Xiaochuan, co-chairman of the IFF, called for closer coordination of macroeconomic, financial and regulatory policies among different countries, especially when it comes to managing the spillover effect of developed economies’ monetary tightening on developing ones.