Overseas observers see strong rebound in China's economy in first 2 months

BEIJING -- Newly-released economic data for the first two months of this year show China's economy has recovered better than expected, with strong rebounds seen in key areas.

Overseas observers say the Chinese economy has shown good resilience in the face of pressures and challenges, expecting greater potential for the future.

Improving economic indices

Since the beginning of this year, with the implementation of the macro policy to stabilize growth, China's industrial production, investment and consumption growth have accelerated, and its import and export volume also maintained a sound momentum in mounting.

According to economic indicators for the first two months of the year, the value-added industrial output, fixed-asset investment and retail sales of consumer goods all went up significantly year-on-year, with 7.5 percent, 12.2 percent and 6.7 percent, respectively.

On the basis of a high base, the total volume of imports and exports of goods still maintained double-digit growth, showing persistent resilience of foreign trade growth.

Iris Pang, chief economist for Greater China at ING bank, hailed Chinese economy as a "big surprise" when commenting on the better-than-expected data for retail sales of consumer goods, industrial production and fixed assets investment.

Mao Xuxin, principal economist at the National Institute of Economic and Social Research, a London-based economic think tank, said China's relatively complete and efficient supply chains have ensured stable production of export products during the COVID-19 pandemic, adding that its supply chains and industrial chains are constantly upgrading.

As can be seen from official statistics, high value-added and high-tech products, including new energy vehicles, have made a greater contribution to the export growth, Mao said.

As the quality of China's economy improves and the consumption level rises, foreign investors are increasingly interested in investing in China.

In the first two months of this year, foreign direct investment into China, in actual use, expanded 37.9 percent year-on-year, among which high-tech industries saw a 73.8-percent yearly increase, becoming structural highlights of foreign investment growth.

Based on its confidence in the Chinese economy and long-term commitment to the Chinese market, Germany's BMW Group announced on Feb 11 that it would extend the validity of its joint venture until 2040 and increase its stake in BMW Brilliance from 50 percent to 75 percent.

In the eyes of Tommy Wu, lead economist at British think tank Oxford Economics, China's rapid FDI growth has been stimulated by its continuous opening up policies and the resilience of its supply chains.

Recent data on industrial production and manufacturing investment suggest these sectors have been very active and supportive of the economy, Wu said, adding that he assumed this will "continue to be the case."

Herman Tiu Laurel, founder of Philippine BRICS Strategic Studies, said "the double up to triple digit growth of high-tech manufacturing, new energy vehicles, industrial robots are really evidence of the Chinese economy elevating to cutting-edge and even higher-quality development."

More positiveness

In terms of the global environment, the COVID-19 pandemic is still spreading, the world situation is turbulent, geopolitical conflicts are intensifying, and external instability and uncertainty are growing. China's economy is facing triple pressures of shrinking demand, supply shock and weakening expectations.

Given the background, overseas experts are confident that China has enough policy space to ensure steady and healthy economic operation, with great potential for future growth.

China can adopt a series of reform measures to reduce the impact of potential external risks, said Ronnie Lins, director of the China-Brazil Center for Research and Business, who believes China's growth target is within reach.

Tommy Xie, an economist with Singapore-based OCBC Bank, said that China's policy space is currently large enough to cope with such pressures as supply shock and weakening expectations, adding that the policy space is a major advantage for China to keep its economy operating within an appropriate range.

The powerful performance of the Chinese economy showing in the first two months can and are really boosting optimism, which is good news for Asia, ASEAN, and the Regional Comprehensive Economic Partnership, said the Philippine expert, Laurel.

Wichai Kinchong Choi, senior vice-president of the Thailand-based Kasikornbank, attributed the strong performance of China's economy to sound government decisions, proper economic structure and the resilience of the huge market, adding that the growing momentum of China's import and export is giving an important boost to the world economic recovery.

The good momentum of China's economy in 2022 so far has created favorable conditions for the global economic recovery, said Argentine government adviser Lucas Gualda, adding that the world needs a growing China, as its development provides great demand for other countries.