China can play vital role in stimulating global growth in 2023, says UN economist

UNITED NATIONS -- China can play a significant role in stimulating the global growth in 2023, Hamid Rashid, a leading United Nations economist told Xinhua in an interview after the flagship report, World Economic Situation and Prospects 2023, was released on Wednesday.

2022 was a rough year, but in 2023, China "can play a very important role in stimulating the global growth," said Rashid, chief of the Global Economic Monitoring Branch, Economic Analysis and Policy Division, UN Department of Economic and Social Affairs, while commenting on China's economic prospects.

"I think all the ingredients for recovery are there. We are very optimistic about the recovery in China," said Rashid, the lead author of the flagship report.

He expressed confidence that China's economy will experience a "robust recovery" in 2023 as its policies are aligned correctly, meaning that the fiscal policy and monetary policies are "in the right direction."

There has been no tightening of monetary policy (in China), which is quite reassuring because that would have probably suppress economic growth, he said.

Rashid said China's economy has a favorable condition to grow as its inflation rate has been low, despite high inflation elsewhere.

Compared with other countries, China still has "a very low inflation rate," which is an exceptional advantage.

The global financial crisis in 2008 transformed China into the engine of the global economy, Rashid recalled. Restoring China's role as an engine is good news for many other developing countries, he added.

WESP 2023 paints a gloomy picture of the global economy and warns that multiple and intersecting crises are likely to add further damage to the global economy, with growth set to slow from 3 percent in 2022 to 1.9 percent this year.

Rashid emphasized the need to invest in productive capacity, promote human capital, and combat climate change, adding that by making these investments, the world will "come out of this difficult time" as they will have "high multiplier effects," leading to higher growth and reducing inflation.

"China has done it very well over the years," as the government "can actually steer the recovery," he said.

Considering the importance of China's economy to the rest of the world, the economist noted that the country consumes both commodities and tourism goods.

Taking tourism goods for example, Rashid said that they are "a major source of revenue" for many countries including Malaysia, Thailand, and Indonesia.

"Europe now depends on Chinese tourism. And China plays a very important role in global tourism," he said, adding that the growth of outbound tourism will benefit many countries that are dependent on the industry.

China has "very strong trade ties" with other manufacturing economies in the region, including Japan and South Korea, he said. Among others, South Korea and Japan benefit from China's recovery when it recovers well, he pointed out.

The Chinese economy will be on a trajectory of "not only recovery, but sustained recovery" if the COVID-19 pandemic can be controlled, Rashid said.

He also stated that "we are facing difficult economic times where international cooperation can play very important role in restoring global confidence."