AfDB: Chinese economy will remain resilient

The Asian Development Bank said on Wednesday it expects China’s economy to remain resilient and sustainable over the medium to long term.

“There is a combination of issues that many countries in developing Asia are facing, but we see the Chinese government reacting quite strongly to some of these headwinds through a combination of fiscal and monetary policy measures,” Safdar said. Parvez, adviser to East Asia. AfDB Department, during a virtual press briefing.

“The problems in the real estate sector in China are also a source of slowing growth at the moment, but on the positive side, we see the government being very proactive and taking a number of fiscal and monetary policy measures to stabilize the situation, which will lay the foundation for a resilient and sustainable economic anchor,” Parvez said.

In the short term, however, the Chinese economy and other economies face headwinds. Updated AfDB projections show China’s GDP will grow 3.3 percent this year, while developing Asia’s overall GDP is expected to grow 4.3 percent, he said.

“There is a temporary slowdown, both globally and regionally, in terms of economic activities. But we expect this situation to be reversed and China to maintain its pre-eminence as an Asian hub for trade and investment activities, not only in this region but also in the world,” he said.

“We believe China remains a great investment destination to start as the world’s second largest economy with plenty of opportunity.”
The country remains an important part of regional and global production networks and supply chains. It is moving further and further up the technology ladder and investing in high-tech as well as medium-tech, which is the future in terms of productivity, he said.

Earlier this year, AfDB President Masatsugu Asakawa told Nikkei in an interview that the regional development bank would start discussions next year on whether to end new loans to China. Some observers say the nation no longer needs economic aid from other countries, Nikkei reported.

Decisions on the reclassification of AfDB borrowers are taken by the bank’s shareholders. The criteria for graduating from regular AfDB assistance are: gross national income per capita, availability of commercial capital flows on reasonable terms and achievement of a certain level of development by key economic and social institutions , said Teresa Kho, AfDB Managing Director for the East. Asia.

“When we submitted our country partnership strategy between the AfDB and the People’s Republic of China last year, which was approved by the Board of Directors, we mentioned in a specific paragraph that the graduation evaluation will be considered mid-term review of the implementation of the country partnership strategy to assess China’s progress against key indices and other performance measures at the sector and thematic level. the updated analysis will serve as the basis for discussions with the PRC authorities on development partnership and readiness for graduation,” Kho said.

“It will be best to wait for the country partnership strategy mid-term review process to share some data on China’s progress before anyone comes to a conclusion,” she said. .

Looking ahead to the fourth quarter, China’s exports may weaken, the impact of COVID-19 on the economy will persist, and the recovery in domestic demand will be supported by the continued strengthening of growth stabilization policies and the continued optimization of anti-pandemic policies, the Bank of China Research Institute said in a report released Wednesday.

China’s GDP growth is expected to reach around 5% in the fourth quarter and around 3.5% this year.

Policies focus on stabilizing domestic demand and expectations. China should balance the demand for growth stabilization with fiscal sustainability. The government should also continue to increase the efficiency of capital utilization and strengthen the functions of structural monetary policy instruments, the report said.
Source: China Daily

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