- China recently announced a new economic stimulus package focused on boosting competitive sectors like climate change while avoiding the troubled property industry, according to former PBOC deputy governor Zhu Min.
- Although modest in size, Zhu predicts the stimulus will have a significant impact by targeting competitive areas. However, he notes China still faces cyclical issues like COVID-19 and structural challenges relating to its development model.
- Looking ahead, Zhu forecasts China’s GDP growth will be 4-5% in 2023 and 2024. While lower than the 6% target, this would represent a major rebound from 2.2% growth in 2022.
China recently announced a new economic stimulus package. Zhu Min, a former deputy governor of the People’s Bank of China, says the plan will boost new competitive sectors while avoiding the troubled property industry.
Ex-PBOC Official Predicts Significant Impact Despite Modest Size
Although the stimulus package is not large, Zhu predicts it will have a big impact because it focuses on areas like climate change that will make China more competitive globally. He says the plan avoids funneling money into real estate, which is facing troubles.
Ex-PBOC Official Highlights Structural and Cyclical Challenges
In addition to the stimulus plan, Zhu says China faces both cyclical and structural economic issues. The structural challenges relate to China’s development model and demographics. The cyclical issues include COVID-19 impacts and the property downturn.
Former PBOC Deputy Governor Discusses China’s Growth Outlook
Looking ahead, Zhu expects China’s economy to grow between 4-5% in 2023. While lower than the 6% target, he says this range would still represent a significant turnaround from 2.2% growth in 2022. For 2024, Zhu predicts China’s GDP growth will also land between 4-5%.
The former PBOC deputy governor sees China’s new stimulus plan as a targeted effort to boost emerging competitive industries. He believes it will have a sizable impact despite its limited overall size. However, Zhu notes China continues to grapple with structural and cyclical economic challenges.