Chinese officials refute foreign media hype about 'slower' recovery
Published: May 17, 2023 10:36 PM
Passengers wait at Guangzhou Baiyun International Airport on April 29, 2023, the first day of the five-day May Day holidays. Photo: Courtesy of Guangzhou Baiyun International Airport

Passengers wait at Guangzhou Baiyun International Airport on April 29, 2023, the first day of the five-day May Day holidays. Photo: Courtesy of Guangzhou Baiyun International Airport

Chinese officials on Wednesday stressed that China's economic fundamentals remain solid and the recovery is on track, effectively refuting recent foreign media hype about slower growth in certain economic indicators in April.

As the effects of the policy of expanding domestic demand continue to emerge, consumer demand will further pick up, market confidence will be strengthened, and expectations will continue to improve, Meng Wei, a spokesperson for the National Development and Reform Commission (NDRC), said on Wednesday during a press conference.

"The recovery and expansion of demand is the key to the sustained recovery of the economy and the important direction for promoting the steady growth of the industrial economy," Meng stressed, noting that the NDRC will take comprehensive measures to unleash consumption potential and build a high-quality consumption supply system. 

The comments came as some foreign media outlets have been promoting pessimistic views about China's economic recovery after slower growth in certain economic indicators. 

Also on Wednesday, Wang Wenbin, a spokesperson for the Foreign Ministry, said that the Chinese economy is resilient, full of vitality and has great potential. 

"The fundamentals of the Chinese economy remain positive for the long term, and the effects of various policies are continuing to emerge," said Wang.

Wang made the remarks during a regular press conference, in response to a question about remarks made by IMF Managing Director Kristalina Georgieva, who said that China is going to contribute about one-third of global growth this year, which will provide more opportunities to other countries.

The IMF has projected that the Chinese economy will grow "quite strongly" by 5.2 percent in 2023. Other international institutions, including the World Bank, have raised their forecasts for China's economic growth this year. 

Yet, foreign media outlets have recently stepped up hype over "disappointing" economic data in April and the "weakening" Chinese yuan against the US dollar. 

Analysts pointed out that it is unreasonable and unscientific to draw the conclusion of a slowdown in China from a single quarter or month's economic data.

Economic data for the first quarter and April suggested that China's supply side was already recovering, Hu Qimu, deputy secretary general of the digital-real economies integration Forum 50, told the Global Times on Wednesday.

"As for the slowdown in the growth rate of some economic indicators in April, it is due to seasonal factors and it takes time for the economy to recover. Three or four months isn't long enough for the economy to return to the growth rate of the pre-epidemic level," said Hu.

Hu also said that China's consumer price index, which grew 0.1 percent in April, was the result of expanded supply, which resulted from recovered domestic logistics; therefore, it is reasonable for the prices of many categories of products to fall. 

"For example, the prices of pork and vegetables fell month-on-month, so people can allocate their disposable income to other products," said Hu.

Despite slower growth in exports in April, consumption saw an impressive rebound.

In April, retail sales totaled 3.49 trillion yuan ($498.8 billion), up 18.4 percent year-on-year and 7.8 percentage points faster than the previous month, according to data released by the National Bureau of Statistics on Tuesday.

Analysts stressed that expanding domestic demand is necessary to boost China's economic growth, as the country's export data revealed that demand in the US and Europe continued to fall.

The expansion of domestic demand needs to be accomplished by ensuring employment, and the government has provided a lot of policy support, analysts said.

More efforts should be made to stabilize employment so that more people can have stable sources of income, Fu Yifu, senior researcher at the Suning Financial Research Institute, told the Global Times.

"The key is to stabilize the operation of micro, small and medium-sized enterprises by cutting taxes and fees, granting subsidies, reducing layoffs and increasing financial support," said Fu.

Such supports are already in place and their effects will continue to emerge. Also, the NDRC will also continue to increase medium- and long-term lending to producers, increase investment in industrial and technological upgrading, and promote the technological and equipment upgrading of enterprises, according to the spokesperson.