China’s message to the world: we are open for business

China’s message to the world: we are open for business

Instead of predicting 2023 to be “tougher,” she expects the second half of this year to “improve” through 2024.

Positive data from Europe and the US in recent weeks, along with the easing of draconian pandemic measures in China, have raised hopes that the global economy will avoid a recession this year.

Liu also predicted that China’s growth would “most likely return to its normal trend” this year, which could be good news for Australian exports while “stabilizing prices and employment”. It is driven by a policy aimed at expanding a certain domestic demand.

He also said China’s COVID-19 outbreak, which infected hundreds of millions of people when Beijing abruptly lifted restrictions on December 7, was under control.

“China has passed the peak of the epidemic, and working people have returned to normal,” he said. “The time from the peak of the infection to the return to normal was short and exceeded expectations.”

Liu’s comments reinforced signals last month that Beijing would adopt market-friendly policies and a less hostile approach to trading partners such as Australia. China already hints at lifting restrictions on Australian coal and seafood.

The Australian China Business Council said many of its members plan to visit China in the coming months. A formal delegation of business leaders is also scheduled to visit China in March after the annual National People’s Congress.

“they [Australian exporters] We look forward to reconnecting with our customers and partners as part of the process of assessing the Chinese market emerging from the pandemic and appropriately identifying and managing future risks,” said David Olson, Chairman of the Australian China Business Council. I’m here.

BHP boss Mike Henry speaking at the World Economic Forum in Davos.

“It is unlikely that there will be a strong rushback.”

But he said exporters would be cautious about renegotiating with China, which imposed sanctions on $20 billion worth of Australian goods after a diplomatic dispute with the Morrison government.

“Australian exporters still see China as a market with great medium- to long-term opportunities. This means that many people who are wary of over-relying on it are unlikely to come back with a strong momentum.

Investors are voicing Liu to the international business community at a time when confidence in China, the world’s second-largest economy, was being eroded by Mr. We welcomed his forward-looking sales pitch. Australian Finance Minister Jim Chalmers said this week that China’s slowdown was “one of the major economic challenges facing Australia”.

Goldman Sachs analysts said Wednesday, “Liu He’s comments should help further restore investor confidence, addressing market concerns about policy uncertainty over the real estate sector and common prosperity. ” he said.

“We expect broad activity growth to pick up from weaker levels in the second half of 2022 as the economy recovers further from the peak of Covid infections.”

Australia, which relies heavily on Chinese demand for its major exports, has been particularly concerned over the past year by Beijing’s growing emphasis on ideology rather than economy. Treasury Secretary Jim Chalmers said this week that slowing growth in China was “one of the major economic challenges facing Australia this year”.

Though the tone of his Davos speech was cordial, Liu criticized Western central banks. interest rate hike To the point where they undermine the global economic outlook.

His outlook for the Chinese economy has won the support of former Prime Minister Kevin Rudd. Australia’s ambassador-elect to Washington told Davos that China could possibly return to 5% growth this year, but only if it can weather domestic and international “headwinds”. will be

Former Prime Minister Kevin Rudd speaks at the World Economic Forum in Davos.

Liu, who last spoke at Davos in 2018, also said China’s property sector was undergoing a massive liquidity injection, or “blood transfusion,” and that risks lurking at top property developers had been addressed. rice field. Restrictions imposed to prevent overheating have now been lifted to allow the industry to expand.

Beijing can spur domestic demand, but Mr. Rudd said China’s recovery would be “difficult to export.”

Trade “will probably not be as strong a driver of China’s own domestic growth rate as some Chinese economic planners would like,” he said.

“Cold War Mentality”

Liu appeared to blame sharp interest rate hikes by Western central banks, saying “some countries are choosing policies that are likely to result in a rate hike-recession-recovery loop.” rice field.

“We urge you to pay more attention to the negative impact of interest rate hikes in major economies on emerging market and developing economies, so as not to further increase debt and financial risks,” he said.

He said current inflation is driven by a more complex set of factors, requiring more than higher interest rates to keep demand down.

“Supply-side measures are also needed to repair supply chains and maintain energy and food security,” he said.

He said tackling these problems requires global cooperation and cautioned against adhering to “Cold War thinking.”

Rudd said strategic competition between Washington and Beijing could affect the trajectory of the two economies this year.

“If China and the US can keep their geopolitics in some equilibrium, we should see reasonable growth.

Rudd said that if China can get back to 5% growth, it will “strongly support global economic growth next year.”

He also flagged a possible visit to Hong Kong and possibly Beijing on his final visit as a representative of the Asiatic Society before taking up a diplomatic post in Washington.

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