Page 26 - 2022 White Paper on the Business Environment in China
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2 White Paper on the Business Environment in China
from deep recession, although the speed and size normalization, as the core CPI (consumer price
of recovery will be up to the evolving pandemic, index, a gauge of inflation) is still at a low level.
relationships among major countries and other China should avoid a sudden tightening of its
uncertainties. An objective and reasonable economic policy. To sustain growth, policymakers
evaluation of the changes in the global landscape should consider boosting production in the private
is of great significance for China which is set to sector through monetary measures instead of
embark on a new journey toward the goal of fully enhancing the government's spending through
building a modern socialist country. By sticking to extending fiscal deficits, senior researcher at
the new dual circulation development paradigm, China Finance 40 Forum Zhang Bin said. After an
China is expected to lead the world in economic earlier forecast that the US central bank might end
recovery in 2022 (Zhang, Outlook). monetary easing earlier than expected because
of the availability of vaccinations and accelerating
China will continue to be one of the main economic recovery, 10-year US Treasury yields
driving forces for global growth. The country surged beyond 1.6 percent to a multiple-year high
announced that its industrial output rose by and stocks in some major markets slumped. The
9.8% year-on-year in April 2021, and retail sales European Central Bank promised to accelerate
grew by 17.7% year-on-year. China's role as the the pace of bond purchases to contain the rise in
world factory is cemented with producing and financing costs and a faltering economic recovery
selling everything from oxygen concentrators (Chen, Economist Concerned).
and masks to cellphones and home renovation
supplies. The country's recovery from the Vaccination
COVID-19 pandemic in 2020 not only boosted
the domestic economy but also the profits of Although the global economy was growing again
international companies (CD, Still Driving). after a 4.3% contraction in 2020, the pandemic
had caused a heavy toll of deaths and illness,
China were forced to deal with the ripple plunged millions into poverty, and may depress
effects from the United States' US$1.9 trillion economic activity and incomes for a prolonged
fiscal relief package, which boosted US imports period. Top near-term policy priorities were
and fuel price increases as huge liquidity was controlling the spread of COVID-19 and ensuring
injected into the vulnerable global financial rapid and widespread vaccine deployment. The
market. The stimulus included US$1,400 direct World Bank Group made available 12 billion US
payments to individual US taxpayers to promote dollars to support the vaccination of a billion
consumer spending, an increase in unemployment people in developing countries. The inequality of
insurance supplements, and funds for vaccine the downturn and the likely recovery was dramatic
distribution. A preliminary estimate from the IMF as people at the bottom of the income scale were
showed that the March 2021 US rescue package hardest hit by the shutdowns and the recessions,
would increase its GDP by 5 to 6% in 2021. Most and unfortunately will likely be the slowest to
countries should benefit from stronger US imports regain jobs, get healthcare, vaccination and adjust
of commodities, goods and services, which will to the post-COVID-19 economy. The risk is that it
aid global economic recovery. But as always, a may take years for people at the bottom of the
watchful eye on potential risks is needed. With US income scale to see a sustained improvement in
dollar funding costs being very low, the risks of a their circumstances. The COVID-19 pandemic has
sudden tightening in financial conditions should made the already high debt level substantially
be carefully managed by the US Federal Reserve worse, both in terms of domestic and external
and other central banks in advanced economies. debt burden. To support economic recovery,
Emerging markets and developing economies, authorities need to facilitate a re-investment
especially those with financial vulnerabilities and cycle aimed at sustainable growth that is less
weak trade ties to the US, should be ready with dependent on government debt, the report
contingency policies for potential downside risks noted. Policymakers need to continue to sustain
and possible tightening of financial conditions. the recovery, gradually shifting from income
China may take a longer period of time for a policy
26
from deep recession, although the speed and size normalization, as the core CPI (consumer price
of recovery will be up to the evolving pandemic, index, a gauge of inflation) is still at a low level.
relationships among major countries and other China should avoid a sudden tightening of its
uncertainties. An objective and reasonable economic policy. To sustain growth, policymakers
evaluation of the changes in the global landscape should consider boosting production in the private
is of great significance for China which is set to sector through monetary measures instead of
embark on a new journey toward the goal of fully enhancing the government's spending through
building a modern socialist country. By sticking to extending fiscal deficits, senior researcher at
the new dual circulation development paradigm, China Finance 40 Forum Zhang Bin said. After an
China is expected to lead the world in economic earlier forecast that the US central bank might end
recovery in 2022 (Zhang, Outlook). monetary easing earlier than expected because
of the availability of vaccinations and accelerating
China will continue to be one of the main economic recovery, 10-year US Treasury yields
driving forces for global growth. The country surged beyond 1.6 percent to a multiple-year high
announced that its industrial output rose by and stocks in some major markets slumped. The
9.8% year-on-year in April 2021, and retail sales European Central Bank promised to accelerate
grew by 17.7% year-on-year. China's role as the the pace of bond purchases to contain the rise in
world factory is cemented with producing and financing costs and a faltering economic recovery
selling everything from oxygen concentrators (Chen, Economist Concerned).
and masks to cellphones and home renovation
supplies. The country's recovery from the Vaccination
COVID-19 pandemic in 2020 not only boosted
the domestic economy but also the profits of Although the global economy was growing again
international companies (CD, Still Driving). after a 4.3% contraction in 2020, the pandemic
had caused a heavy toll of deaths and illness,
China were forced to deal with the ripple plunged millions into poverty, and may depress
effects from the United States' US$1.9 trillion economic activity and incomes for a prolonged
fiscal relief package, which boosted US imports period. Top near-term policy priorities were
and fuel price increases as huge liquidity was controlling the spread of COVID-19 and ensuring
injected into the vulnerable global financial rapid and widespread vaccine deployment. The
market. The stimulus included US$1,400 direct World Bank Group made available 12 billion US
payments to individual US taxpayers to promote dollars to support the vaccination of a billion
consumer spending, an increase in unemployment people in developing countries. The inequality of
insurance supplements, and funds for vaccine the downturn and the likely recovery was dramatic
distribution. A preliminary estimate from the IMF as people at the bottom of the income scale were
showed that the March 2021 US rescue package hardest hit by the shutdowns and the recessions,
would increase its GDP by 5 to 6% in 2021. Most and unfortunately will likely be the slowest to
countries should benefit from stronger US imports regain jobs, get healthcare, vaccination and adjust
of commodities, goods and services, which will to the post-COVID-19 economy. The risk is that it
aid global economic recovery. But as always, a may take years for people at the bottom of the
watchful eye on potential risks is needed. With US income scale to see a sustained improvement in
dollar funding costs being very low, the risks of a their circumstances. The COVID-19 pandemic has
sudden tightening in financial conditions should made the already high debt level substantially
be carefully managed by the US Federal Reserve worse, both in terms of domestic and external
and other central banks in advanced economies. debt burden. To support economic recovery,
Emerging markets and developing economies, authorities need to facilitate a re-investment
especially those with financial vulnerabilities and cycle aimed at sustainable growth that is less
weak trade ties to the US, should be ready with dependent on government debt, the report
contingency policies for potential downside risks noted. Policymakers need to continue to sustain
and possible tightening of financial conditions. the recovery, gradually shifting from income
China may take a longer period of time for a policy
26
