Investment to push China's growth in 2022, but COVID uncertainty stays

The economic outlook projections triggered by the conference from research bodies have been largely looking toward cross-cyclical measures to boost investment and consumption.

The COVID-19 pandemic, however, may affect consumption and foreign trade growth, according to experts and industrial insiders quoted by a government website.

A report by the Academic Center for Chinese Economic Practice and Thinking at Tsinghua University said the key for a steady growth in 2022 will be shoring up investment.

With an eye on the positive fiscal and monetary policies, the think tank projects that investments in infrastructure and manufacturing tend to stabilise before climbing next year. The report expects 8 per cent annual growth in fixed asset investment for 2022, well above the 5.4 per cent growth before the pandemic. Consumption, driven by rising household disposable income, will play a critical role.

However, as many advanced economies are bouncing back from COVID-19 and has showed strong momentum, the report warns that room for China's macro policy maneuver might be more limited.

The Tsinghua report projected that China's gross domestic product (GDP) growth in 2022 will range from 4.9 per cent to 5.8 per cent, and said it will be critically important next year to strike a proper balance between containing COVID-19 and economic development.

Fibre2Fashion News Desk (DS)