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16 January 2024, 17:02

Foreign institutions bullish on China's economy

Photo: China Daily
Photo: China Daily
BEIJING, 16 January (BelTA - China Daily) - A number of foreign institutions have made a macroeconomic outlook for China in 2024. Many institutions believe that this year, China's economy will show a momentum of steady progress, and economic growth may be generally higher than the average of last year. At the same time, real estate is expected to achieve a gradual recovery, and domestic consumption will continue to improve, reported Beijing News on Tuesday.

Multiple foreign institutes forecast that there is still enormous potential for China to leverage on fiscal or monetary policies. In 2024, China's fiscal policy will be more proactive, and the synergy of macro policies will increase. A-share are expected to rise in 2024.

135 million domestic tourist trips were made during the three-day New Year holiday that ended on Jan 1, surging 155.3 percent year-on-year, according to data from the Ministry of Culture and Tourism, with a rise of 9.4 percent compared with the same period in 2019.

Domestic tourism revenue reached 79.73 billion yuan ($11.22 billion) over the course of these three days, an increase of 200.7 percent year-on-year and a rise of 5.6 percent over the same period in 2019.

As per data released from the Ministry of Commerce, the sales of key retail and catering enterprises in the country increased by 11 percent year-on-year during the New Year holiday. It is noticeable that the sales of gold, silver and jewelry, construction materials, and furniture rose by 21.2 percent, 13.1 percent and 12.9 percent, respectively.

Wang Tao, chief China economist at UBS Investment Bank said that, consumption growth is expected to outpace GDP growth this year, as the recovery in service industry, labor market and household incomes continues.

However, Liu Jing, chief economist at HSBC, believes that in 2024, the new people-oriented urbanization process will further release consumption potential, while the gradual stabilization of the real estate market will also promote consumption for improvement, and expand the growth momentum to other areas.

Multiple agencies predict that with the support of multiple policies, the real estate market will recover and finally achieve stability.

Liu said the dual-track system of "affordable housing and commercial housing" is a handy tool for stabilizing the real estate market. Vigorously increasing the supply of affordable housing can not only make housing more affordable, but also hedge against the downward impact of the commercial housing market.

Pan Gongsheng, governor of the PBOC said earlier that the central bank would provide low-cost funding to local governments to buy oversupplied commercial housing and transform it into affordable housing. In December last year, PBOC restarted supplementary mortgages, which played a part in the government's efforts to stabilize the property market.

Xiong Yi, chief economist at Deutsche Bank China, said that the PBOC will continue to maintain easy policies in 2024, forging a stable property market.

Many analysts of foreign institutions believe there is still room for China's fiscal and monetary policies to exert force this year, and aim to be more positive overall.

Liu expects that in 2024, the fiscal policy will be more active, under the tone of "promoting stability with progress".

There is also more room for monetary policy to operate, Liu said.

Xiong also said that only by increasing the intensity of macro policies and strengthening the coordination and cooperation of various policies can better promote the real effect of economic policy measures.

Through a number of institutions, China's A-share market has room to rise this year.

David Leung, head of wealth management of Standard Chartered Bank, believes there may be more room for industry choice in the Chinese stock market than in other markets.

Liu said that new economic fields such as new energy and high-end manufacturing have made remarkable progress in the past few years, but there is still potential for them to grow in the national economy.

The economic policy applied by Chinese government takes into account the smooth transition of economic structure, indicating that in the new year, the precise balance of short-term and long-term goals will promote the growth of new momentum and the continuous development of old momentum, thereby driving the economy steadily toward a higher-quality development path, Liu said.
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