January 18, 2023
DAVOS – On a day when reports said China’s population shrank for the first time in six decades and its economic growth rate slumped to one of the worst in nearly 50 years, the country’s Vice-Premier Liu He took to the stage in Davos, Switzerland, at the World Economic Forum (WEF) on Tuesday to assuage concerns over the state of its economy.
Addressing a packed Congress hall, he said his government will follow a proactive fiscal policy and a prudent monetary policy and keep prices and growth stable.
The focus will be on expanding domestic demand, supporting the private sector, promoting fair competition and deepening reforms of its state-owned enterprises.
“If we work hard enough, we are confident that growth will most likely return to its normal trend, and the Chinese economy will see a significant improvement in 2023,” he said, adding that “high-quality economic growth must be our goal”.
“A noticeable increase of imports, more investment by companies, and consumption returning to normal can be expected,” he told the audience.
China’s door will only open wider and Beijing will create a market-oriented business environment underpinned by a sound legal framework, he added.
The Vice-Premier is the highest-level Chinese official at the Forum, and his session was hosted by WEF founder and chairman Klaus Schwab, one of the few that he is hosting this year.
The state of China’s economy and the pandemic have been among key concerns cited in surveys and reports of the Forum.
The reports on China’s population and economic growth featured in discussions at different sessions.
The Chinese government said on Tuesday that 9.56 million people were born in China in 2022, while 10.41 million people died.
The second set of figures showed that the country’s gross domestic product figures missed the official growth target for 2022 – which was 5.5 per cent and already one of the lowest in decades.
Many have also been concerned over the speed with which China eased pandemic controls and its repercussions on the spread of the virus as well as its impact on the economy.
But Mr Liu signalled a return to normality and China’s intent to continue to seek foreign investments to grow its economy.
“More focus will be placed on expanding domestic demand, keeping supply chains stable, supporting the private sector, reforming the state-owned enterprises, attracting foreign investment, and preventing economic and financial risks,” he said.
Highlighting China’s gains and significant contribution to the global economy, he said that over the past 10 years, China’s gross domestic product grew from 54 trillion yuan (S$10 trillion) to 121 trillion yuan.
Also, average life expectancy rose from 74.8 to 78.2 years, and contribution to global growth reached around 36 per cent.
Asked by Professor Schwab to comment on the state of the pandemic, Mr Liu said China has passed the infection peak and was slowly returning to normal.
The country’s priority is to take care of the elderly, especially those suffering from chronic ailments, and during the upcoming Spring Festival when many people will be travelling to see their families.
An earlier session on China’s next chapter at the Forum was packed with a long line of people waiting to sit in for the discussions.
Several panellists expressed optimism and said China’s reopening could drive growth and even prevent a recession.
Among them was Mr Kevin Rudd, president and CEO, Asia Society, who said he expects “a bounce back”, with growth “turbocharged” by consumer demand.
“I’m expecting a solid growth number for 2023 that will be good for China and importantly for the world,” the former Australian prime minister said.