China's recovery biggest certainty to global economy; 'inflation threat' hype absurd
Published: Feb 08, 2023 11:08 PM
Lujiazui, a financial zone in Shanghai Photo: VCG

Lujiazui, a financial zone in Shanghai Photo: VCG

China reopening is a "wild card" for Canada to avoid a possible recession this year, Reuters reported on Tuesday, citing analysts. While admitting Canada's economy will be beneficiary China's economic recovery, the report continued the "inflation threat" hype among foreign media outlets recently, claimed commodity prices rise driven by the rebound of the second largest economy will cause "inflationary pressure."

Since China's economic recovery has picked up momentum after implementing a range of optimized epidemic control measures, some Western media outlets have started a new round of smearing and coming up with the "inflation threat" narrative. The Bloomberg said last week that China's economic recovery could offset weakness in Europe and a recession in the US, but also is the "next big threat to global inflation."

It should be noted that such "inflation threat" hype has twisted the facts and does not hold water. When China's GDP grew rapidly at a 6.1-percent rate in 2019, the global inflation rate was 2.19 percent. In comparison, when China's GDP grew by 3 percent in 2022, the global inflation rate rose to 8.8 percent. It's crystal clear that China's economic growth is not the cause for global inflation, and the "inflation threat" narrative is nothing but a far-fetched new theory concocted by those who would discredit the Chinese economy under any circumstances.

Contrary to what Western media outlets claim, China has kept its inflation stable. The consumer price index climbed 1.8 percent in December, well beneath the US' annual inflation rate of 6.5 percent and the EU's 9.2 percent in the same month. 

The high inflation that plagued the global economy in 2022 is the result of a series of complex factors, but the irresponsible monetary policies of Western economies led by the US cannot shirk responsibility. Western sanctions against Russia and the fallout of Western economies' excessive stimulus since the COVID-19 pandemic pushed up the commodity prices, driving the price index in the US and other countries soared to a new high in 40 years.

China's reopening and economic recovery in 2023 is a "clear-cut positive" to the global economy rather than the so-called threat. And China's economic recovery is the biggest certainty rather than a "wild card" to other economies including Canada this year. China's economy is now widely forecast to rebound strongly in 2023. China's economic recovery will provide impetus to the world economy. 

International organizations and investment banks recently intensively raised their projections for China's economic growth in 2023 following impressive recovery of the country's consumption market during the Spring Festival holidays. The Chinese economy is projected to grow 5.2 percent year-on-year in 2023, the IMF said in its latest World Economic Outlook, up 0.8 percentage points from its projection in October. Morgan Stanley raised its outlook for China's GDP growth this year to 5.7 percent from 5.4 percent, predicting that a rebound in activity will come earlier and be sharper than expected, according to media reports.

At a time of mounting challenges for the global economic recovery, great expectations have been placed on China. IMF Managing Director Kristalina Georgieva said in January that "there is a great deal of hope that China's reopening would lead through 2023 to a better impact on global growth," according to media reports.

Whether countries can catch the opportunities brought by China's rebound depends on whether they can drop political bias and remains rational in promoting economic and trade cooperation with China. Instead of wasting time hyping up nonsense about the "inflation threat," Western countries should focus on coping with their own economic challenges and discuss expanding economic and trade cooperation with China so as to better take advantage of China's economic rebound.

The author is a reporter with the Global Times.