China’s leaders have expressed a calm outlook on the country’s prospects for economic recovery after most of the COVID-19 restrictions on business activity were lifted last year.
Beijing has set itself a goal of increasing Gross Domestic Product (GDP) by 5 percent by 2023, with only a slight increase in fiscal assistance.
The government’s conservative increase target of 6% by 2023 acknowledges that China’s growth rate is still facing headwinds. These include the impact of slower global economic growth on China’s exports and challenges related to the real estate sector and local government debt.
Indicating that long-term prospects, including leverage constraints and financial stability, remain key elements of long-term policy, only a slight increase in government fiscal support, as well as more tailored monetary strategies, have been implemented.
There are still several factors that prevent the return and growth of consumption.
The impact of the pandemic has subsided and only a recovery in retail sales can lead to growth.
While some increase in fiscal support is needed, it is important to increase such support “blindly”.
Pickup in retail and GDP growth in Asia-Pacific
Retail sales rebounded 12.5% in 2021 after falling in 2020. In 2021, GDP increased 8.2%.
An overall positive performance of the economy can help increase tax revenue and demand for workers. But the biggest pressure this year is on foreign trade.
Many analysts expect China’s exports to grow this year at best. This is due to reduced demand for Chinese products due to the slowdown in the EU and US economies.
Asia-Pacific stocks were mixed as investors took a closer look at China’s growth target set in its parliamentary sessions and waited for a week of economic statistics.
Shares of Hong Kong broadcaster TVB have seen a surge for the past four days after its announcement of a collaboration with Alibaba’s Taobao prominent to begin an e-commerce blended stream last week.
Its Hong Kong-traded shares rose 21% on Monday after closing the session up 51.6%, representing a year-to-date gain of 90.79%.
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