CGTN: Expanding domestic demand and opening-up, Chinese economy off to good start in 2023

BEIJING, Feb. 16, 2023 /PRNewswire/ — Encouraging indicators ranging from tourism and box office revenues to the purchasing managers’ index (PMI) showed that China’s economy has gotten off to a good start in 2023.

As Chinese President Xi Jinping highlighted at last December’s annual Central Economic Work Conference, Chinese economic work in 2023 will focus on expanding domestic demand, accelerating the building of a modern industrial system, working unswervingly to both develop the public sector and support the non-public sector, boosting foreign investment, and defusing major economic and financial risks.

Qiushi Journal, a flagship magazine of the Communist Party of China (CPC) Central Committee Thursday published Xi’s article titled “Several Major Issues in Current Economic Work,” which is part of Xi’s important speech delivered at the annual Central Economic Work Conference on December 15, 2022.

Domestic demand expansion

Stressing insufficient demand is now the principal contradiction facing economic operation, Xi in the article pointed out efforts should be made to boost domestic demand by prioritizing the recovery and expansion of consumption and encouraging more private investment through government investment and policy incentives.

The article also called for stabilizing exports to developed countries and expanding exports to emerging market economies.

The consumption boom during Spring Festival holiday reflects the potential of domestic market and the dynamism of the Chinese economy.

During the week-long holiday, sales revenue of China’s consumption-related sectors rose 12.2 percent from last year’s Spring Festival holiday, which ran from January 31 to February 6, data from the State Taxation Administration showed.

According to the country’s Ministry of Culture and Tourism, about 308 million domestic trips were made during this year’s Spring Festival holiday, up 23.1 percent year on year. Domestic tourism revenue generated during the week-long holiday totaled 375.8 billion yuan (around $55.52 billion), up 30 percent year on year.

The country’s box office raked in 6.76 billion yuan (about $1 billion), the second-highest gross figure for the annual holiday, the China Film Administration said.

High-level opening-up

The article urged efforts to keep advancing high-level reform and opening-up and leverage the strengths of China’s enormous market to attract global resources and production factors with China’s strong domestic economy.

The Chinese president emphasized attracting and utilizing foreign capital through widening market access and fostering a world-class business environment to grant foreign-funded enterprises national treatment and improve services for foreign-funded enterprises.

China’s foreign trade businesses have seen a surge in orders in the early days of 2023 with sounder COVID-19 response measures in effect. The PMI for China’s manufacturing sector came in at 50.1 in January, returning to expansion after three consecutive months of contraction while the new orders index rose seven percentage points to 50.9 percent, data from the National Bureau of Statistics showed.

According to a recent report released by the Asian Development Bank (ADB), China remains the top destination for global foreign direct investment (FDI) in Asia. The Chinese Ministry of Commerce said the FDI in the Chinese mainland, in actual use, expanded 6.3 percent year on year to 1.23 trillion yuan in 2022. In U.S. dollar terms, the FDI inflow went up 8 percent year on year to $189.13 billion.

In its latest update to the World Economic Outlook report, the International Monetary Fund (IMF) has lifted its forecast for China’s economic growth in 2023 to 5.2 percent from a previous prediction of 4.4 percent. Investment banks, including Morgan Stanley and Goldman Sachs, have also revised their growth forecasts for the world’s second largest economy.

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