China needs to maintain dynamic economic growth to counter geopolitical headwinds: Economists

Workers weld at a workshop of an automobile manufacturer in Qingzhou, east China’s Shandong Province, February 28, 2021 (Photo: Xinhua)

As geopolitical conflicts intensify and the COVID-19 epidemic continues, China needs to protect its industrial chain from external and internal risks and focus on globalization to counter the United States’ attempt to contain its economic development, many famous economists said at a major forum. on Saturday.

There have been growing concerns about China’s economic prospects in recent days, as US politicians have used the COVID-free China strategy to exacerbate the push to separate the supply chain from China, with high-tech export restrictions as a lever to encircle China’s technological development.

Facing the complex international situation and unprecedented challenges, China needs to maintain dynamic economic growth while accelerating opening up, Justin Lin Yifu, former chief economist of the World Bank and member of the Standing Committee of the Chinese People’s Political Consultative Conference (CPPCC) National Committee, said Saturday.

Lin made the remarks at the Tsinghua PBCSF Senior Economist Forum in Beijing, which focused on the economic and political outlook for China amid the turmoil of 2022.

Lin noted that the advantage of lag can still ensure that China maintains an 8 percent growth potential and achieves 5 to 6 percent growth annually, and the country will continue to contribute at least quarterly to global growth.

Moreover, China is the largest trading partner of more than 120 countries and the second largest trading partner of more than 70 other countries. This means that for more than 90 percent of countries around the world, China’s growth will be an opportunity for them to boost their own growth and employment as long as China is able to maintain dynamic economic growth and adhere to openness, which is China’s best solution to countering the United States’ push for separation, Lin noted.

If China can maintain its growth potential, Lin said, by the time China’s per capita GDP reaches half that of the United States, which means that China’s economic size is double that of the United States, the world could enter a situation New stable. “At that time, the United States will maintain good relations and trade with China, which will be important for its leading companies to maintain their global leadership and also for employment in the country.”

Even with the strategic competition between the United States and China intensifying at present, economists agreed on the need to strengthen economic and trade relations with the United States.

Yu Yongding, a member of the Chinese Academy of Social Sciences, said at the forum that while China could buy fewer US Treasuries, it needed to buy more US products and stick to the first phase of the trade deal as much as possible, despite some objective obstacles and difficulties.

On how to deal with external shocks and risks in the short term, Li Daokui, Mansfield Freeman Professor of Economics at Tsinghua University, noted at the forum that it is important for China to do its own thing well.

At a time when many factories in China are facing disruption due to strict anti-epidemic measures, the United States is adopting a variety of tools to persuade Asia-Pacific countries to shift their supply chains out of China. The United States just held a two-day summit with eight ASEAN leaders on Thursday and Friday. US President Joe Biden is scheduled to visit South Korea and Japan later this month and is expected to witness the official launch of the Indo-Pacific Economic Framework.

“Under the current situation, China must find ways to safeguard the stability and safety of industrial chains while implementing a dynamic COVID-free policy,” Li noted. “Essentially, protecting the industrial chain is protecting China’s growth potential in the future.”

Global Times

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