CCIEE Held 159th Monthly Economic Talk with the Theme of Analysis of the Economic Situation in 2022 and Outlook for 2023

On January 18, 2023, the China Center for International Economic Exchanges (CCIEE) held the 159th "Monthly Economic Talk" with the theme of "Analysis of the Economic Situation in 2022 and Outlook for 2023". The meeting was chaired by Han Yongwen, Vice Chairman of CCIEE, Wang Yiming, Vice Chairman of CCIEE and Chairman of the Academic Committee at CCIEE, Xun Xianchun, Contract Research Fellow of the National School of Development at Peking University (attended online), Zhu Baoliang, Chief Economist of the State Information Center (attended online), and Zhang Ming, Deputy Director of the Institute of Finance&Banking at the Chinese Academy of Social Sciences and Deputy Director of the National Institution for Finance&Development (attended online), delivered speeches respectively.

Wang Yiming pointed out that 2022 was an extremely challenging year for China's economic development. However, the macroeconomic situation was stable, and several indicators performed better than market expectations. With the positive effects of pandemic prevention and control measures becoming evident, economic activities are expected to accelerate, leading to a significant rebound in China's economic growth in 2023. He believes that it is important to quickly implement the decisions and deployments made at the Central Economic Work Conference, seize the current window of opportunity for accelerated economic recovery, and effectively boost market confidence from four aspects. Firstly, it is necessary to boost consumer confidence and expedite the recovery and expansion of consumption. By implementing incentive measures, consumer potential can be stimulated, and excess savings can be gradually guided into consumption. Secondly, it is important to boost confidence among enterprises and entrepreneurs and enhance the intrinsic driving force for economic growth. This can be achieved by maintaining policy stability, mobilizing enterprise enthusiasm, supporting the development and growth of private enterprises, protecting their property rights and the rights of entrepreneurs in accordance with the law, and creating a better environment for fair competition and development. Thirdly, investor confidence should be restored to effectively expand social investment. This can be accomplished by opening up market access in certain sectors, addressing the issue of "visible openness but invisible implementation" and mobilizing private investment enthusiasm and initiative. Lastly, confidence in foreign investment should be boosted to stabilize and increase both existing and new foreign investment. This requires creating a market-oriented, rule-of-law, and internationalized business environment, further relaxing market access, enhancing the liberalization and facilitation of foreign investment, effectively retaining high-quality existing foreign investment, and attracting more high-tech foreign investment projects to be implemented.

Xu Xianchun stated that achieving a 3% economic growth rate in China in 2022 was not easy. From the production perspective, the secondary industry performed well, playing a positive role in GDP growth. However, the real estate sector and offline contact-based service industry performed poorly, resulting in a lower growth rate of value-added in the tertiary industry, which significantly dragged down the overall economic growth. From the demand perspective, consumer demand had insufficient impact on economic growth, but investment played a more significant role in driving economic growth. Manufacturing and infrastructure investment maintained rapid growth. From the income perspective, household income showed steady growth, but it remained noticeably lower than pre-pandemic levels. The profit growth of industrial enterprises above a certain scale continued to decline, although there was some improvement in the structural differentiation of profits. From the price perspective, the consumer price index (CPI) experienced an initial increase and subsequent decrease, while the producer price index (PPI) for industrial goods continued to decline.

Zhu Baoliang believes that in 2022, China achieved its basic goals of stable economic growth, employment and prices. Regarding the economic trends in 2023, caution with optimism should be maintained, while being vigilant about issues such as weak consumer spending and a slowdown in manufacturing investment. More proactive macroeconomic control policies need to be implemented in 2023 by combining the focus of fiscal and monetary policies with supply-side structural reforms. It is important to continue reducing taxes, lowering fees, and implementing the "streamline administration and delegate power, improve regulation, and upgrade services" reforms. The policies should shift from simply supporting market entities to both supporting market entities and directly stimulating demand. Taking into account the optimized effects of epidemic prevention and control, the low base effect, and the overlapping effects of macroeconomic control policies, the effects of stabilizing the economy through a series of policies will continue to manifest, leading to gradually restored market confidence. The Chinese economy in 2023 is expected to exhibit a pattern of "initially low, followed by moderate growth, and then stabilization," with a growth rate slightly higher than 5% for the full year.

Zhang Ming points out that the COVID-19 pandemic has had a profound impact on the global supply chain, with severe inflationary pressures in some developed countries and an increase in geopolitical conflicts, among other medium- to long-term issues, increasing the risk of global economic stagnation. He predicts that global economic growth will significantly decline in 2023, leading to more emerging markets and developing countries experiencing financial crises due to the global economic downturn and the Federal Reserve's tapering of quantitative easing. The major financial markets will continue to experience two-way fluctuations. Due to the impact of global demand downturn, it is expected that China's trade surplus in goods will shrink, the trade deficit in services will expand, and the current account surplus will decrease. However, the expectation of RMB depreciation against the US dollar will weaken, and the situation of capital outflows will significantly improve.

After the speeches, the participating experts engaged in interactive exchanges with the media. Some researchers and member units of CCIEE, research institutions, enterprises, and news media participated in the conference through online channels.