Policy and resilience raise confidence in stable economic growth this year

The International Monetary Fund has raised its forecast for China's economic growth for 2024 to 5.0 percent from the previous 4.6 percent. It said this after concluding the 2024 China Article IV Consultation, its annual assessment of the Chinese economy, on Tuesday. The IMF also raised its forecast for China's economic growth to 4.5 percent for next year, up 0.4 percentage points compared with its April projection.

Actually, after China released its strong first-quarter economic data, many international institutions have raised their expectations for China's economy. The IMF said that its upward revisions of China's economic growth forecast are driven by China's strong GDP growth in the first quarter and recent policy initiatives. The IMF not only fully affirms China's economic performance, but also pins high hopes on its policies and economic trend in the next stage.

China's GDP registered growth of 5.3 percent year-on-year in the first quarter, and, given that, this was achieved despite last year's high base, it is indeed confidence-boosting. It was possible mainly because China's accelerated net export growth has considerably offset the slowdown in domestic demand.

Driven by the export industry chain, the current investment in China's manufacturing sector has continued to maintain a nearly double-digit growth rate, and the operating conditions of enterprises, those of small and medium-sized ones in particular, have improved significantly. Consequentially, the country has seen improvements in employment conditions. Statistics show that China's surveyed urban unemployment rate fell to 5.0 percent in April, the lowest in more than two years. A recent global foreign direct investment confidence index released by Kearney raised China's ranking from seventh last year to third. In the context of the global economy tending to stabilize and improve, China's greater efforts to stabilize foreign investment and foreign trade are expected to play a stronger driving role in boosting the economy.

China is expected to release a series of policy measures to mitigate the downside risks of its economy. The recent issuance of ultra-long-term special government bonds and the introduction of a slew of measures to stabilize the real estate market are rallying a stronger momentum for China's economy in the times ahead.

What now matters most to China's economy is that the country should adopt an integrated and comprehensive policy package to facilitate the adjustment of the real estate sector and provide adequate macroeconomic support to boost domestic demand and mitigate downside risks. With the continuous unleashing of policy effects, aided by the still-existing resilience of external demand, China will in all probability achieve economic growth of 5.0 percent or more this year.