China’s economy is recovering faster than expected, but multiple risks must still be guarded against, the World Bank said Wednesday in its latest China Economic Briefing.
The report, titled “From Recovery to Rebalancing: China’s Economy in 2021,” noted that these potential risks include a fast but uneven recovery, a slower-than-production recovery in domestic demand and a slower-than-investment recovery in consumption, among others.
China’s economic growth is expected to slow to 2 percent this year and is expected to pick up to 7.9 percent next year as consumer and business confidence strengthens and labor market conditions improve, the report said.
At the same time, however, recurring new crown epidemics could continue to disrupt economic activity, while continued bilateral tensions between China and its major trading partners could also be a major risk to the economic recovery.
In response, Rizal, director of the Bank’s China Bureau, said that the global environment remains highly uncertain and that a premature removal of policy support and excessive tightening in China could bring the recovery to a standstill. He added that the Chinese government should shift the focus of its fiscal support from traditional infrastructure to more social spending and green investments.
Recent Comments