China still expected to reach its 5.5% GDP growth target this year

China will likely meet its annual growth target of around 5.5% this year with the help of the government’s effective measures to control Covid-19 outbreaks and stabilize market expectations, economists and experts said. Despite facing mounting pressure from a resurgence in domestic Covid-19 cases and a complicated and grim external environment, they believe the country has plenty of policy tools to stabilize the overall economy, while the impact of outbreaks is likely to be temporary. Citing China’s faster-than-expected 4.8% year-on-year growth in the first quarter, they said there still exists a gap between first-quarter growth and the country’s annual growth target, calling for more steps to accelerate macro-economic policy support, especially for hard-hit enterprises and sectors. Compared with major economies, China reported higher GDP growth with lower inflation in the first quarter, demonstrating robust economic resilience despite downward pressures, said Wang Yiming, Vice Chairman of the China Center for International Economic Exchanges. He said that while China witnessed sustainable industrial growth, rising investment demand and strong innovation momentum in the first quarter, the growth of major economic indicators has slowed since March because of the Covid-19 cases and the Russia-Ukraine conflict. With many market entities like micro and small businesses facing difficulties and mounting pressures, he said, more efforts should be made to actively respond to the concerns of those entities to stabilize market expectations and provide stronger macro-economic policy adjustments to stabilize the economy.

Wang’s views were echoed by Liu Qiao, Dean of the Guanghua School of Management at Peking University. Considering the strong resilience of the economy and China’s ample tools, Liu believes China has the confidence to meet its annual growth target of around 5.5% in 2022. Sang Baichuan, Dean of the Institute of International Economy at the University of International Business and Economics, said China’s economy will remain in the process of recovery this year while facing pressures from the Covid-19 pandemic, geopolitical tensions and monetary policy adjustments in the United States and Europe, the China Daily reports.