As leaders gathered for the second day of the World Economic Forum in Davos, China appeared to offer Western leaders an olive branch, yet many remain skeptical in light of Beijing’s belligerent diplomacy under the country’s authoritarian president, Xi Jinping.
Vice Premier Liu said to a group of Businessmen and political leaders On Tuesday, China said it was keen to revive mutually beneficial trade ties, saying the market – not the government – should play a “fundamental role in resource allocation.”
“Comprehensive opening-up is the basis of state policy and the main engine of economic progress. China’s national reality dictates that opening-up to the world is a necessity, not a benefit,” Liu said. “We have to open up more widely and make it work better.”
Liu’s comments referred to the beating China’s economy In recent years, with strict lockdowns, quarantines and strict COVID-19 containment measures.
“If we work hard enough, we are confident that in 2023, China’s growth will most likely return to its normal direction. The Chinese economy will see a great improvement,” said Liu, a senior economic official of the Cabinet, China’s cabinet.
Liu said China expects to see a significant increase in its imports, more investment by businesses, and a return to regular consumption habits in the coming months. He says easing coronavirus restrictions, and ending quarantines for people arriving from abroad are key factors in the economy’s recovery.
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His comments come after China released data showing its economic growth fell to its second lowest level in at least four decades last year, squeezed by anti-virus controls and a slump in real estate that Liu said had nearly led the economy into a systemic crisis.
China’s economy grew by 3% in 2022, less than half the previous year’s rate of 8.1%. It was the second-lowest annual rate since at least the 1970s after 2020, when growth fell to 2.4%.
Liu emphasized the government’s efforts to manage the previous decline, particularly in subsidizing the real estate industry, which accounts for 40% of total bank lending and 50% of local government revenue. After years of rapid economic growth, he says China’s goal is “high-quality economic development”, reforming state-owned enterprises and supporting the private sector.
EU President Ursula von der Leyen, who spoke before Liu, sounded more suspicious of China’s alleged aims, accusing Beijing of trying to undercut European companies with subsidies and blocking access to its internal market, The Telegraph reported.
“Competition for net zero must be based on a level playing field,” she said. We will not hesitate to launch investigations if markets are distorted by such support.
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The World Economic Forum’s annual meeting in Davos, Switzerland, runs until Friday.