AfDB and OECD confident in the resilience of the Chinese economy
BEIJING: Some monthly indicators of the Chinese economy have seen fluctuations or slower growth due to factors such as flooding, the resurgence of local cases of Covid-19 and a relatively high base in 2020, leaving some Western opponents to again peddle that China is failing in its role as a global growth engine. But, how true is this?
In their latest outlook for global growth, international organizations including the Asian Development Bank (AfDB) and the Organization for Economic Co-operation and Development (OECD) have renewed their confidence in the resilience and potential of the Chinese economy.
The Chinese economy is expected to maintain the recovery over the remainder of 2021, supported by its strong exports, according to the “Asian Development Outlook 2021 Update” published by the ADB, which forecast the country’s GDP growth of 8.1 % in 2021.
Despite an increase in new cases of Covid-19, the gradual recovery in Chinese consumption is expected to continue, bolstered by improvements in the labor market and consumer confidence, according to the report.
According to the latest data from the National Bureau of Statistics, in the first eight months, retail sales of consumer goods grew 18.1 percent year-on-year.
In addition, the industrial sector also maintained the expansion. During the January-August period, value-added industrial production, a key indicator reflecting industrial activities and economic prosperity, increased 13.1 percent year-on-year.
The labor market of the world’s second-largest economy also remained broadly stable, with the urban unemployment rate rising to 5.1% in August.
In the first eight months, 9.38 million new jobs were created in China’s urban areas, reaching 85.3 percent of the annual target.
The contributions of net exports and investments to China’s growth, supported by healthy trade dynamics, are also expected to increase this year, according to the ADB report.
In its latest interim economic outlook, the OECD forecasts the Chinese economy to grow 8.5% in 2021, as in its May forecast.
China’s optimistic outlook came as the Paris-based organization forecasted global economic growth of 5.7% this year, 0.1 percentage point lower than its May forecast.
Earlier data from the General Administration of Customs showed that during the January-August period, China’s foreign trade maintained its growth momentum, with total imports and exports increasing 23.7 percent year-on-year. annual to reach 24.780 billion yuan ($ 3.8 trillion).
Both exports and imports registered double-digit growth in the eight-month period, increasing 23.2% and 24.4% respectively from the previous year.
Growth in China is expected to stay close to its pre-pandemic trajectory, the OECD report notes, adding that commodity exporters are benefiting from high export prices and strong global demand for goods.