Bustling scenes on the Bund area in Shanghai on January 16. Photo: VCG

Editor's note:

China's economy overcame numerous internal and external challenges last year, achieving 5.2 percent expansion and surpassing the target set at the beginning of the year. In the face of tests such as weak external demand, it wasn't easy for the Chinese economy to reach this level of recovery in the first year after the three-year pandemic. 

However, Western critics who constantly underplay China's hard-won economic achievements are again trumpeting "China economic collapse" narrative. The Global Times (GT) invited Gary Hufbauer(Hufbauer), a non-resident senior fellow at US think tank Peterson Institute for International Economics, to share his perspectives on China's economic performance in 2023 and its economic outlook in 2024.

GT: China's GDP grew 5.2 percent year-on-year in 2023, higher than the target of about 5 percent, data from the National Bureau of Statistics (NBS) showed on Wednesday. How do you view the growth rate in 2023, the first year of the post-COVID recovery?

Hufbauer: The 5.2 percent growth figure for China's economy in 2023 is a strong number, given the size of the Chinese economy, its state of development and the weak outlook for global growth. I sharply disagree with critics who say the Chinese economy is stumbling.

GT: How do you view the current economic situation in China? How do you evaluate China's economic prospects in 2024?

Hufbauer: In my view Chinese prospects in 2024 are good. Beijing can certainly manage dislocations in the property market and prevent any sort of financial crisis. Expansionary fiscal and monetary policies can avert the threat of deflation. China's economic challenges are modest compared, for example, with the challenges facing the EU.

GT: China remains an important engine driving world economic growth. The IMF's senior resident representative in China predicted that the Chinese economy will maintain a sound growth in 2024 and continue to account for one-third of global economic growth. How do you view the global significance of the steady and positive development of the Chinese economy?

Hufbauer: The world economy depends on strong Chinese growth, and that looks assured for 2024. If Chinese growth dropped to 2 percent, as expected for the US, and even less for the EU and Japan, the world outlook would be dismal.

GT: Global growth is projected to slow for the third year in a row - from 2.6 percent last year to 2.4 percent in 2024, the World Bank said. In a world battling many uncertainties, how should major economies jointly tackle challenges and promote global growth rather than politicizing economic issues?

Hufbauer: World leaders should welcome globalization and avoid new trade or investment restrictions. Unfortunately that's not happening in Europe, the US, India and several other places. This is an arena where China can lead.

GT: How should the largest economy in the world - the US - further improve its economic cooperation with China - the second-largest - to provide more certainty and positive energy for the global economy?

Hufbauer: The US should stop the search for new national security risks arising from trade and investment with China, and instead search for new areas of mutual economic gain. Many barriers can be reduced with no harm to the national security of the US or China.

GT: China sent only 45 percent of its exports to the developed economies including the EU and the US in November, figures from data provider CEIC showed. The decline in trade between China and Western countries in November reveals that the reality of "de-risking" is concerning, according to the WSJ. What's your perspective on "de-risking"?

Hufbauer: "De-risking" has gone far enough. "China hawks" in the US Congress want to expand "de-risking" until it reaches "de-coupling." This is misguided, and can only result in dividing the world economy into a China bloc and a US bloc. 

A two-bloc world will depress global growth. Moreover, many countries in Asia, Latin America and Africa reject the idea that they should show primary allegiance to one bloc or the other.