(Economic Observer) International institutions look at the 2021 "Annual Report" of China's economy: performance exceeds expectations and stable growth is supported

  China News Agency, Beijing, January 18th, title: International institutions look at China's economic 2021 "annual report": performance exceeds expectations and stable growth is supported

  China News Agency reporter Liu Liang

  The 2021 China Economic "Annual Report" has been released a few days ago.

As the world's second largest economy, China is closely watched by international institutions.

On the whole, international institutions believe that China's overall performance in 2021 is higher than expected, and looking forward to 2022, despite some internal and external pressures, steady growth will still be supported.

Economic performance beats expectations in 2021

  Facing the complex and severe situation both inside and outside, China's economy has handed over a hard-won total report card in 2021: the gross domestic product (GDP) increased by 8.1% year-on-year.

In terms of quarters, the first quarter increased by 18.3% year-on-year, the second quarter increased by 7.9% year-on-year, the third quarter increased by 4.9% year-on-year, and the fourth quarter increased by 4.0% year-on-year.

  "This data is slightly higher than our expectations, and the growth rate of industrial production in December 2021 is also faster than our previous expectations." said Hu Dongan, senior economist at Oxford Economics.

  According to Qu Hongbin, chief economist of HSBC Greater China, although China's GDP growth rate in the fourth quarter of 2021 was lower than the 4.9% in the third quarter, it was still higher than the general expectations of international financial institutions; its two-year compound average growth rate (5.2%) compared to the third quarter (4.9%).

Among them, calculated on the basis of the two-year compound average growth rate, within the time period covered by statistics, the service industry has rebounded significantly.

  Zhao Yaoting, a global market strategist at Invesco Asia Pacific (excluding Japan), also admitted that although China's economic growth slowed in the fourth quarter of 2021, it did not decline significantly as some feared.

On the contrary, the resilience of China's industrial production is still driving the economy as a whole.

Meanwhile, manufacturing and exports continue to be the main drivers of China's economic engine.

Steady growth in 2022 still supported

  Looking forward to 2022, international institutions believe that although the economy faces some challenges, there will still be support for stable growth.

  Zhao Yaoting pointed out that the current local outbreak of the new crown epidemic is still a major source of economic pressure.

In particular, the recent local outbreak in China will inevitably put pressure on household spending and consumer sentiment.

  Qu Hongbin also bluntly stated that although the data in the fourth quarter of 2021 was overall higher than expected, the data in the consumption and service industries in December 2021 are still under pressure.

In his view, the impact of factors such as local epidemics still exists in the short term, and consumption growth is expected to be under pressure in 2022.

  While seeing the challenges facing China's economy, international institutions also pointed out that China's economic growth in 2022 will still be supported accordingly.

  In response to the local outbreak of the recent epidemic, Zhao Yaoting said that China has recently demonstrated a more practical and detailed approach to dealing with newly confirmed cases, such as partial and targeted blockade measures.

"December's strong industrial production came amid Xi'an's strict implementation of lockdown measures. This suggests that China's supply chain may be more resilient in terms of production shifts than many imagined."

  Hu Dongan also said that in 2022, although China's economy is facing downward pressure, factors that are good for China's economic growth still exist.

“We expect China to ease macro policies and stabilize economic growth. This is also a signal released by China’s recent cut in the medium-term lending facility (MLF) rate. Looking ahead to the full year of 2022, China’s infrastructure investment and credit are expected to achieve strong growth. At the same time , the real estate industry will receive more support.”

Global economic growth slows

  In 2022, the increase in uncertainties in the global economic environment is also one of the reasons for the pressure on China's economy.

  According to data from the World Health Organization, the recent super transmission speed of the new coronavirus variant Omicron has caused waves in many major global economies, and the global supply chain crisis has once again become worse.

Under the shadow of a new round of epidemics, international institutions have also lowered their forecasts for global economic growth.

  The World Bank's latest Global Economic Outlook report predicts that global economic growth will slow significantly over the next two years, from 5.5% in 2021 to 4.1% in 2022 and further to 3.2% in 2023.

The Organization for Economic Cooperation and Development expects that the strong rebound in economic growth in major global economies such as the United States, Japan, Canada, Germany, Italy and the United Kingdom will gradually weaken in the future.

In 2022, the world's major economies will generally face downward economic pressure.

  Nonetheless, international institutions still have confidence in China's economic growth.

The World Bank expects that downside risks to China's economic outlook have increased against the backdrop of a general slowdown in the global economy, but with fiscal policy support, growth momentum is forecast to pick up.

Morgan Stanley also said that with the introduction of more favorable economic policies, China's economy will still show a good recovery in 2022.