Page 22 - 2023 White Paper on the Business Environment in China
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3 White Paper on the Business Environment in China
shifted from infection control to case treatment withdrawal of fiscal support and monetary policy-
with the objective of preventing severe cases. tightening weighs further on activity, according
Observers have said with the flow of people and to the World Bank report. Worldwide, the World
exchange of goods to be further facilitated, the Bank forecasts a "sizable downgrade" to global
new policies are set to gradually revive business growth, expecting the pace to slow sharply from
activities across a wide range of sectors, including 5.7 percent in 2021 to 2.9 percent in 2022. That
consumer spending, investment, and foreign forecast also reflects a nearly one-third cut to the
trade -- thus, the huge market potential will be January 2022 forecast for 4.1 percent in the same
unleashed to allow economic output to expand. year. Contributing factors include the situation
"The Chinese economy has strong resilience, in Ukraine, surging inflation and rising interest
great potential, and vitality, and the fundamentals rates, noted the World Bank, adding that several
remain sound in the long run," Han said, adding years of above-average inflation and below-
that optimized epidemic response, coupled with average growth are now likely, with potentially
existing and new policy steps, will exert a major destabilizing consequences for low- and middle-
positive impact on economic recovery. Reflecting income economies. "It's a phenomenon—
on the previous response strategy, Han and his stagflation—that the world has not seen since
colleagues in the office of the Central Committee the 1970s," World Bank President David Malpass
for Financial and Economic Affairs said strict wrote in the foreword to the report. Reducing
control measures were necessary in the past the risk of stagflation will require targeted and
when the fatality rate and the proportion of severe impactful measures by policy makers across
cases remained high. Over the past three years, the world, Malpass noted. These efforts include
China has withstood waves of the pandemic and limiting the harm to people affected by the
successfully dealt with over 100 cluster outbreaks, Russia-Ukraine conflict, countering the rise in oil
effectively safeguarding the life and health of its and food prices, stepping up debt relief efforts,
1.4 billion population. The country has managed strengthening health preparedness and efforts to
to keep its COVID-19 severe cases and death rates contain COVID-19, and speeding the transition to
among the lowest in the world. But China never low-carbon energy source (Zhao, World Bank).
considers anti-epidemic efforts and economic
growth as an either-or choice. For the year ahead, Updates on Omicron variant
the Central Economic Work Conference stressed
implementing the optimized epidemic response By April 2022, scientists stressed the need
policies, as well as strengthening coordination to inoculate the vulnerable while urging
and alignment to ensure a smooth transition of vigilance against the newly discovered Omicron
COVID-19 response phases and the maintenance subvariants, and called for more research to
of social stability. The officials said the smooth understand their quick transmissibility and
transition was not only a requirement for public severity. A study published that month by the
health but for economic operation as well. In the University of Hong Kong analyzed the latest
face of a sudden surge of infection cases, China outbreak in Hong Kong. It shows the Omicron
must ensure that the public's medical treatment BA.2 variant's short incubation period and high
and medication needs are met, industrial chains transmissibility make it especially dangerous for
are not interrupted, and prices for medicines and vulnerable populations, especially unvaccinated
daily necessities stay stable (Xinhua, Optimized). seniors. According to Hong Kong public health
authority data, the overall case fatality rate of
For the United States, the World Bank predicted the epidemic was 0.74 percent, but soared to
its growth would slow to 2.5 percent in 2022, 1.2 2.97 percent for the unvaccinated. For people
percentage points below previous projections, who received one shot of a vaccine, the fatality
reflecting sharply higher energy prices, tighter rate was 0.97 percent, while it was 0.16 percent
financial conditions and additional supply for those who had two doses and 0.04 percent
disruptions caused by the conflict in Ukraine. The for those with three doses. While previous
US' growth is expected to moderate further to an studies have indicated the Omicron variant
average of 2.2 percent in 2023-24, as continued
22
shifted from infection control to case treatment withdrawal of fiscal support and monetary policy-
with the objective of preventing severe cases. tightening weighs further on activity, according
Observers have said with the flow of people and to the World Bank report. Worldwide, the World
exchange of goods to be further facilitated, the Bank forecasts a "sizable downgrade" to global
new policies are set to gradually revive business growth, expecting the pace to slow sharply from
activities across a wide range of sectors, including 5.7 percent in 2021 to 2.9 percent in 2022. That
consumer spending, investment, and foreign forecast also reflects a nearly one-third cut to the
trade -- thus, the huge market potential will be January 2022 forecast for 4.1 percent in the same
unleashed to allow economic output to expand. year. Contributing factors include the situation
"The Chinese economy has strong resilience, in Ukraine, surging inflation and rising interest
great potential, and vitality, and the fundamentals rates, noted the World Bank, adding that several
remain sound in the long run," Han said, adding years of above-average inflation and below-
that optimized epidemic response, coupled with average growth are now likely, with potentially
existing and new policy steps, will exert a major destabilizing consequences for low- and middle-
positive impact on economic recovery. Reflecting income economies. "It's a phenomenon—
on the previous response strategy, Han and his stagflation—that the world has not seen since
colleagues in the office of the Central Committee the 1970s," World Bank President David Malpass
for Financial and Economic Affairs said strict wrote in the foreword to the report. Reducing
control measures were necessary in the past the risk of stagflation will require targeted and
when the fatality rate and the proportion of severe impactful measures by policy makers across
cases remained high. Over the past three years, the world, Malpass noted. These efforts include
China has withstood waves of the pandemic and limiting the harm to people affected by the
successfully dealt with over 100 cluster outbreaks, Russia-Ukraine conflict, countering the rise in oil
effectively safeguarding the life and health of its and food prices, stepping up debt relief efforts,
1.4 billion population. The country has managed strengthening health preparedness and efforts to
to keep its COVID-19 severe cases and death rates contain COVID-19, and speeding the transition to
among the lowest in the world. But China never low-carbon energy source (Zhao, World Bank).
considers anti-epidemic efforts and economic
growth as an either-or choice. For the year ahead, Updates on Omicron variant
the Central Economic Work Conference stressed
implementing the optimized epidemic response By April 2022, scientists stressed the need
policies, as well as strengthening coordination to inoculate the vulnerable while urging
and alignment to ensure a smooth transition of vigilance against the newly discovered Omicron
COVID-19 response phases and the maintenance subvariants, and called for more research to
of social stability. The officials said the smooth understand their quick transmissibility and
transition was not only a requirement for public severity. A study published that month by the
health but for economic operation as well. In the University of Hong Kong analyzed the latest
face of a sudden surge of infection cases, China outbreak in Hong Kong. It shows the Omicron
must ensure that the public's medical treatment BA.2 variant's short incubation period and high
and medication needs are met, industrial chains transmissibility make it especially dangerous for
are not interrupted, and prices for medicines and vulnerable populations, especially unvaccinated
daily necessities stay stable (Xinhua, Optimized). seniors. According to Hong Kong public health
authority data, the overall case fatality rate of
For the United States, the World Bank predicted the epidemic was 0.74 percent, but soared to
its growth would slow to 2.5 percent in 2022, 1.2 2.97 percent for the unvaccinated. For people
percentage points below previous projections, who received one shot of a vaccine, the fatality
reflecting sharply higher energy prices, tighter rate was 0.97 percent, while it was 0.16 percent
financial conditions and additional supply for those who had two doses and 0.04 percent
disruptions caused by the conflict in Ukraine. The for those with three doses. While previous
US' growth is expected to moderate further to an studies have indicated the Omicron variant
average of 2.2 percent in 2023-24, as continued
22
