China can play significant role in stimulating global growth, says leading economist

This Jan 14, 2023 photo shows a worker inspecting a car before it rolls off the production line at an automobile factory in Qingdao, east of China's Shandong province. PHOTO XINHUA UNITED NATIONS China can play a significant role in stimulating global growth in 2023, Hamid Rashid, a leading United Nations economist, told Xinhua after the flagship report, World Economic Situation and Prospects WESP 2023, was released on Wednesday.

I think all the ingredients for recovery are there. The lead author of the flagship report, Rashid, said we are very optimistic about the recovery in China.

He expressed confidence that China's economy will experience a robust recovery in 2023, as its policies are aligned correctly, meaning that fiscal policy and monetary policies are in the right direction. He said that there has been no tightening of monetary policy in China, which is quite reassuring because that would have probably suppressed economic growth.

Rashid said China's economy has a favorable condition to grow as its inflation rate has been low despite high inflation elsewhere in the world.

China still has a very low inflation rate compared to other countries, which is an exceptional advantage.

The 2008 global financial crisis turned China into the engine of the global economy, according to Rashid. He said that restoring China's role as an engine is good news for many other developing countries.

WESP 2023 paints a gloomy picture of the global economy, and warns that multiple and intersecting crises are likely to cause further damage to the global economy with growth expected to slow from 3 percent in 2022 to 1.9 percent this year.

READ MORE: World Bank: China to see robust growth

Rashid emphasized the need to invest in productive capacity, promote human capital, and combat climate change, and said that by making these investments the world will come out of this difficult time as they will have high multiplier effects, leading to higher growth and reducing inflation.

He said that China has done very well over the years, as the government can actually steer the recovery.

The economist noted that the country consumes both commodities and tourism goods, considering the importance of China's economy to the rest of the world.

Taking tourism goods for example, Rashid said they are a major source of revenue for many countries including Indonesia, Thailand and Malaysia.

He said that China plays a very important role in global tourism, and that the growth of outbound tourism will benefit many countries that are dependent on the industry.

He said that China has very strong trade ties with other manufacturing economies in the region, including Japan and South Korea. South Korea and Japan benefit from China's recovery when it recovers well, he pointed out.

The Chinese economy will be on a path of recovery if the COVID 19 pandemic can be controlled, Rashid said.

He stated that we are facing difficult economic times and that international cooperation can play a very important role in restoring global confidence.