Up, up! Why have overseas institutions raised their expectations for China?

Text/Li Xiaoyu

The report card of China's "red" economy in the first quarter has boosted overseas confidence in China's economic prospects. Recently, many overseas institutions have raised their expectations for China's economic growth this year.

Up, up!

Nomura International (Hong Kong) recently raised its forecast for China's economic growth this year to 5.9%, up from the previous forecast of 5.3%. JPMorgan Chase, UBS and Citi have also raised their forecasts for China's economic growth this year after the release of China's economic data in the first quarter.

Wang Tao, head of Asian economic research and chief China economist at UBS, said China's stronger-than-expected economic rebound in March and first quarter data showed a stronger-than-expected economic rebound, so it raised its 3 growth forecast to 2023.5 percent, compared with 7.5 percent previously.

Citigroup believes that China's economy grew stronger than expected in the first quarter, indicating further growth in the future, and China's economic growth rate may reach 2023.6% in 1.

J.P. Morgan's forecast is more optimistic, raising its growth forecast for China's economy in 2023 to 6.6% from 4% previously, and in its latest report it points to a sustained recovery in the coming quarters.

Zhu Haibin, chief China economist at JPMorgan Chase, said that China's economic activity rebounded strongly in the first quarter, thanks to a significant rebound in tourism-related consumption and services, early macro policy support, stronger-than-expected export performance, and earlier than expected real estate fixed investment. Although industrial value added was slightly lower than expected, the pace of growth remained solid.

As the world's second largest economy, the accelerated recovery of China's economy is of great significance to the world economy, which is in the doldrums. Xing Ziqiang, chief economist at Morgan Stanley China, predicts that after a strong recovery in the first quarter, China's economy is expected to contribute more than 40% to global growth this year.

A stronger and more resilient Chinese economy means new opportunities for investors. In the first quarter, more than 25,5 foreign-invested enterprises were newly established in China, a year-on-year increase of <>.<>%, which shows that multinational companies are "voting with their feet" and regard the Chinese market as a must-fight place to boost performance. With the overall recovery of China's economy, the Chinese market will bring more opportunities to multinational companies, and China's value and attractiveness to foreign investment will be further enhanced.

Stronger growth in the second quarter?

Fu Linghui, spokesman of the National Bureau of Statistics, said that the endogenous driving force of China's economic growth is gradually increasing, macro policies are effective, and economic operation is expected to improve as a whole. Considering that the base affected by the epidemic in the second quarter of last year was relatively low, the economic growth rate in the second quarter of this year may be significantly faster than in the first quarter. In the third and fourth quarters, as the base increases, the growth rate will decline compared with the second quarter. If the impact of the base is not considered, overall economic growth is expected to show a gradual upward trend.

Wang Jun, chief economist of Huatai Securities, believes that China's economic growth rate is expected to be around 7.5%-8% in the second quarter, which will also be the high point of the year; Economic growth slowed down slightly in the third and fourth quarters, but it will still be above 5%.

However, some analysts warn that China's economy still has hidden worries to be solved.

Wang Jun bluntly said that the recovery of consumption is not stable, and automobile consumption and real estate-related consumption are still weak; The expectations and confidence of economic entities still need to be boosted, especially the three major groups of private entrepreneurs, young people and low- and middle-income people; The external economic uncertainty is great, and the possibility of developed economies gradually falling into recession from high inflation is increasing, and there are still many unstable factors.

Zhong Zhengsheng, chief economist of Ping An Securities, also said that the current foundation of China's economic recovery is not yet solid, such as the improvement of real estate sales and the increase in the willingness to start new construction, and the growth of disposable income of residents has not improved significantly.

In addition, as one of the "troikas" driving economic growth, exports are still under pressure. Wang Shouwen, international trade negotiator and vice minister of the Ministry of Commerce, recently said frankly that China's foreign trade achieved a "stable opening" in the first quarter, but the foreign trade situation is still complex and severe, facing many difficulties and challenges, and foreign trade enterprises are also facing some constraints and difficulties, such as inconvenient to participate in foreign exhibitions, rising trade risks, and increased operating pressure.

Recently, a number of official policies and measures have been introduced to promote further economic recovery. For example, on the basis of the previous round of policies to stabilize foreign trade, the State Council has recently introduced a new round of measures, including promoting the steady and orderly recovery of international passenger flights and actively meeting the needs of small and medium-sized enterprises for foreign trade financing.