Balancing the Scales

As of January 8， China will lift quarantine requirements for inbound travelers and COVID-19 control measures for imported cargo， marking a major shift in the country’s pandemic response policy. With these steps， China is taking the initiative in balancing COVID-19 control and economic development. The pursuit of progress while safeguarding stability will be an important feature of the Chinese economy in 2023.

During the Central Economic Work Conference that concluded on December 16， 2022， China’s leadership called for ensuring stability in economic growth， employment and prices. Stabilizing growth means consolidating the foundations for economic recovery and enabling the economy to operate within an appropriate range； stabilizing employment is essential to people’s livelihoods； stabilizing prices means ensuring sufficient supplies to meet demand.

In 2022， the Chinese economy experienced significant fluctuations under the impact of COVID-19. 2023 is an important year as China’s pandemic response enters a new stage. This year， control measures will affect the economy to a lesser extent and the focus will shift back to development. International circumstances may remain volatile， but the inherent dynamics and resilience of the Chinese economy will have a positive impact on the country’s growth.

The Central Economic Work Conference prioritized a consumption boost. Currently， external demand comes with many uncertainties， necessitating the expansion of domestic demand. The key to this expansion lies in consumption and investment.

In 2023， China will implement a prudent monetary policy with a focus on maintaining reasonable and sufficient liquidity and lowering financing costs. The fiscal policy will be proactive to guarantee investment vitality.

Over the past three years， the pandemic had greatly influenced expectations， especially in the private investment sector. It will be important to embrace a positive outlook and form a broad consensus on future sustainable development.

The Chinese Government must take more actions to balance the scales， namely， better coordinate COVID-19 control with economic and social development， improvement of economic quality with reasonable growth of economic quantity， supply-side structural reform with expanding domestic demand， economic policies with other policies， the domestic market with international engagement， and current with long-term development. BR