Muhammad Asif Noor
As the world continues to grapple with the impact of the COVID-19 pandemic, many countries are facing a long road to recovery.
Despite this, the latest reports from international financial institutions indicate that the Chinese economy is poised to grow at a rate that outpaces the global economy.
This news is significant, not only because of the sheer size of the Chinese economy but also because of what it represents for the future of the global economy.
Although China faces the same conditions of growth as other countries, its internal resilience has enabled the Chinese economy to yield sustainability amid a global energy crisis and rising global inflation.
The unprecedented global circumstances, including the pandemic and prolonged conflict in Ukraine, have presented grave challenges to global growth.
The pandemic has affected production and international supply chains, disrupting sustainability in trade, while the conflict in Ukraine inflated the energy crisis worldwide.
The horizontal spread of inflation burdened the capacity of states to keep central bank rates low for increased economic activity.
But the Chinese institutional framework has enabled the country to effectively respond to the pandemic and fully unleash the potential for robust economic growth.
In light of this, the United Nations’ World Economic Situation and Prospects 2023 report sees positive indicators of Chinese growth. It projects that the Chinese economy will grow 4.8 percent this year.
Despite increasing international economic uncertainties and the rising tide of protectionism globally, China remains steadfast in its commitment to economic openness.
This commitment has resulted in record-breaking foreign trade for the country, solidifying its status as the world’s largest trader of goods for six consecutive years.
In addition to its commitment to trade, the country is also a significant player in multilateral cooperation efforts.
The Belt and Road Initiative (BRI) proposed a decade ago, has garnered support from at least 151 countries that have signed cooperation agreements with China.
Furthermore, the latest World Economic Outlook published by the International Monetary Fund forecasts that the Chinese economy will grow at a rate of 5.2 percent.
It is crucial to understand the features of the Chinese economy that maintain its robustness against all odds.
The foremost element is the sheer size of the Chinese economy and the extent of its integration with the global economy. The growth of the Chinese economy will accelerate growth in the global economy.
As World Trade Organization Director-General Ngozi Okonjo-Iweala observed, China is the engine of growth for the world economy.
In the past year, the implementation of the Regional Comprehensive Economic Partnership has resulted in a notable increase in trade between China and the other RCEP economies.
The total import and export volume reached 12.95 trillion yuan ($1.9 trillion), representing 7.5 percent year-on-year growth.
Particularly noteworthy is the double-digit growth in imports and exports between China and eight other RCEP members, contributing significantly to the economic growth and stability of the region.
In addition, there is a combination of other factors triggering growth in China. These factors include a large domestic market, a large pool of highly skilled labor, low production costs, a focus on investment in infrastructure and technology, favorable government policies, and a growing middle-income group.
Moreover, the country’s integration into the global economy as a major trading nation and its large foreign exchange reserves also help to insulate it from the effects of economic downturns in other countries.
However, it is important to note that the growth of the Chinese economy has not been immune to the effects of economic crises and has faced serious challenges, such as declining exports, declining investment, and low production during the pandemic.
But the recovery of the Chinese economy will likely safeguard the path of global economic recovery. China stands ready to cooperate with the world to achieve growth and combat inflation.
The Global Development Initiative proposed by China is designed to put global development at the center of interstate relations.
Since China believes in multilateralism and follows a people-centered approach, the country is willing to act as a source of confidence and strength for the global economy.
*The author is the founder of the Friends of BRI Forum.