China’s economy is expected to pick up, but “arduous efforts” are needed to sustain the recovery in growth due to an adverse external environment and the global economy’s loss of momentum, the country’s top state planner has said.
The comments on Friday came after the release of worse-than-expected economic activity data for November.
While the world’s second-largest economy is expected to benefit from the loosening of China’s strict “zero-COVID” regime announced last week, the abrupt relaxation of rules runs the risk of larger outbreaks of the virus, which could hit businesses and consumers.
Beyond COVID, policymakers also have to navigate the economy through other headwinds, most notably protracted weakness in the property sector and softening external demand.
“With the implementation of optimised measures of COVID-19 prevention and control, while policies to stabilise the economy gradually take effect, China’s economic growth is expected to continue picking up,” said a statement by a spokesperson at the National Development and Reform Commission (NDRC).
“At the same time, we are aware that the economy is facing a more complex and severe external environment, and weakened growth momentum for the global economy,” the spokesperson said.
“We need to make arduous efforts to promote sustained economic recovery,” they added.
China will work on stabilising growth, employment and prices while speeding up construction of infrastructure projects and expanding effective investment, the statement said.
As investment in the property sector slumped significantly, the NDRC said the infrastructure and manufacturing sectors shored up fixed asset investment growth with their capital formation accounting for 26.7 percent of China’s economic growth in the first three quarters.
As of November, the NDRC said it had approved 106 major projects worth about 1.5 trillion yuan ($215.18bn) in total.
As the Lunar New Year holiday season approaches, the state planner has promised to release state pork reserves in a timely manner to keep prices stable.
To spur a COVID-hit economy, China has set out plans to expand domestic consumption and investment, state media reported on Wednesday.
The country will also support eastern Zhejiang province to build a pilot zone for the common prosperity campaign, and will expand the scale of middle-income groups, said the statement.