Zhu Guangyao, an adviser to the Cabinet of Ministers of China, said that China could record GDP growth of about 5.5% this year. He also added that the potential growth rate of China's economy is estimated at 5-6%. According to official data, for the whole of 2021, GDP grew by 8.1%. Consensus estimates suggested that the economy would expand by 8.4% last year. In the 4th quarter of 2021, China's economy expanded by 4% per annum, which was higher than forecasts (+3.6% per annum).
Economists note that in 2022, China's economy is likely to face a number of difficulties, namely a slowdown in the real estate sector and new blockages due to the Omicron coronavirus strain.
However, Li Yang, a former vice president of the Chinese Academy of Social Sciences, said that the Chinese government will use political tools to support the economy. Earlier this week, the Central Bank of China cut interest rates on loans, citing concerns about a slowdown in China's economic growth. The base rate on the one-year loan was reduced to 3.7% from 3.8%, while the base rate on the five-year loan was reduced to 4.6% from 4.65%. The rate on the five-year loan was reduced for the first time since April 2020.
Meanwhile, Zhu Guangyao warned that the upcoming Fed rate hike could increase market volatility and urged the US to strengthen its policy coordination with developing countries.