Top Ten Highlights and Opportunities of China's Economy in 2023
In 2022, facing the severe and complex external environment and the impact of the epidemic, the Chinese economy has made progress in overcoming difficulties, steadily improving its development quality. At the end of last year, the Central Economic Work Conference conducted a scientific assessment of the economic situation in 2023, pointing out that in the face of three major pressures: demand contraction, supply shock, and weakening expectations, economic work in 2023 should adhere to the principle of stability as the top priority and seek progress while maintaining stability. Deployment has been made in macro policies, expanding consumption, industrial development, state-owned enterprise reform, private economy, opening up to the outside world, and risk prevention.
How to better grasp the trend of China's economy in the face of constantly changing market environment? On the first day of this year's two sessions, Ernst&Young will take stock of the top ten highlights and opportunities for China's economy in 2023.
Focus 1: The word 'stability' remains key in 2023
In 2022, in the face of complex domestic and international situations and multiple unexpected factors, China's economic operation is generally stable and progressing. The total economic output has reached a new level, employment prices are generally stable, people's lives continue to improve, and high-quality development has achieved new results.
In 2022, China's gross domestic product (GDP) increased by 3% compared to the previous year, with a total economic output of 121 trillion yuan, ranking second in the world and growing faster than major international economies
In 2023, the overall tone of macroeconomic work is to prioritize stability and seek progress while maintaining stability.
Proactive fiscal policy and prudent monetary policy jointly promote high-quality development: The Chinese government will moderately expand the scale of fiscal expenditure and use it for more targeted investments. The issuance scale of local government special bonds is expected to reach 3.8 trillion yuan in 2023, especially increasing support for key areas such as technology research, rural revitalization, and green development. The government will also further improve tax and fee support policies, promote the transformation and upgrading of small and medium-sized enterprises and enhance their innovation capabilities through tax and fee reduction measures. In terms of monetary policy, the central bank will increase the implementation of monetary policy and provide strong support for expanding consumption and key infrastructure construction. In January 2023, the increase in social financing scale was RMB 5.98 trillion, and the RMB loans issued to the real economy increased by RMB 4.93 trillion.
Accelerate the construction of a new development pattern of "dual circulation" by promoting internal and external factors: In 2023, in terms of expanding domestic demand, the focus should be on both the demand side and improving the supply structure. China will continue to increase residents' disposable income and deeply tap into the huge potential of the consumer market. At the same time, real estate regulation will be further relaxed, and investment promotion measures will be more effective. The platform rectification will shift to encouraging healthy development, and support for small and medium-sized enterprises will significantly increase. In terms of investment, the government will invest more funds in high-tech industries and basic research and development. From the perspective of segmented industries, the growth rate of "new infrastructure" investment represented by new power systems and intercity high-speed rail transit will be faster [4]. In continuing to promote a higher level of opening up, China will promote the high-quality development of the "the Belt and Road", further promote the deep integration of domestic and international industrial chains and innovation chains, and expand new opportunities for countries and regions along the line.
