China’s economy continues to improve, attracting world attention: “decoupling” from China is not in line with reality
Recently, the International Monetary Fund (IMF) stated that China’s economic growth rate is expected to be 5.2% in 2023, and its strong rebound is conducive to Asian and even global economic growth.
The Chinese economy continues to improve and has received widespread attention. The Chinese economy has become the “anchor” of world economic stability, and the argument of “decoupling” from China is also difficult to block the trend of Sino foreign cooperation and mutual benefit.
IMF: Boosting Global Growth
Recently, several foreign media outlets such as CNBC, Bloomberg, and Russian satellite news agency have noticed that the International Monetary Fund (IMF) released the latest version of its World Economic Outlook report on April 11th. The report predicts that the global economy will grow by 2.8% in 2023, a decrease of 0.1 percentage points from previous forecasts. Meanwhile, China’s economic growth rate in 2023 was 5.2%.
The President of the International Monetary Fund, Georgieva, stated during the IMF/World Bank spring meeting that a strong rebound in the Chinese economy is beneficial for global economic growth, and warned global policymakers to be aware that supply chain security issues may trigger the risk of a new Cold War.
Krishna Srinivasan, Director of the Asia Pacific Department of the International Monetary Fund, further analyzed that global inflation is slowing but still high, and the pressure faced by the U.S. and European banking systems has injected greater uncertainty into the already complex economic pattern. However, despite the challenges facing the world economy in 2023, the Asia Pacific region remains vibrant.
Krishna Srinivasan pointed out that the economy of the Asia Pacific region is expected to grow by 4.6% in 2023, 0.3 percentage points higher than previously expected, which largely reflects the effect of the optimization and adjustment of China’s epidemic prevention policies. This means that the Asia Pacific region will contribute more than 70% to global economic growth in 2023.
“The strong rebound of China’s economy will have a positive Spillover effect on relevant trading partners and provide new impetus for Asian economic growth,” said Srinivasan.
The Anchor of World Economic Stability
Decoupling from China is not in line with reality
China’s continuous expansion of opening-up and sustained economic growth have also attracted the attention of the world. The New York Times has noted that China is moving towards a leading position in the sodium battery industry and will dominate the future of the battery industry.
According to the report, China is preparing to lead a new generation of major innovation in rechargeable batteries: replacing lithium with much cheaper and more abundant sodium. In addition, the most promising use of sodium batteries currently is in the power grid, which is a network composed of transmission lines and towers. The market for grid grade batteries is rapidly growing, especially in China.
On April 10th, Reuters also published a commentary article stating that foreign companies’ increased investment in China has “drowned out” some “decoupling” remarks.
Japanese Display Company, a supplier of Apple in the United States, has stated that it will provide OLED technology to Chinese companies and jointly build a display factory; Tesla announced that it will build a new energy storage super factory in Shanghai, with an initial plan to produce 10000 commercial energy storage batteries annually; Airbus Europe plans to build a second production line in China to increase its production capacity.
The two “powerful engines” of the German economy – Volkswagen and the chemical company BASF – are also expanding their investment in China. Volkswagen announced that it will customize its models according to the wishes of Chinese customers and invest billions of dollars in local partners and production bases; BASF is advancing a plan to invest 10 billion euros to build a new chemical production base.
A study by the Kiel Institute pointed out that the cost of decoupling from China is very high for Europe, and considering the close economic relationship between Germany and China, the cost for Germany is particularly high. The institute calculated using the 2019 GDP that Germany may lose over 131 billion euros in revenue.
Recently, some American politicians have expressed similar views. In an interview with Bloomberg, Jay Shanberg, a senior US Treasury official, stated that the United States does not seek to “decouple” from China economically or restrict its growth. This is neither in line with reality nor in our interests.
Former California Governor Jerry Brown told Politico that the idea that some people believe China can be isolated is “naive”. Decoupling from China means a deterioration of the US and world economies. Without China, we cannot stabilize the world economy.