- China reopening after lifting restrictions under the zero-Covid-policy
- 2023 to be a tough recovery year for Beijing
- President Xi Jinping to lead China recovery
As China is about to finish the Year of the Tiger in January in what was meant to be a year of recovery, what is in store for Sino-Africa relations?
President Xi Jinping has had his hands full this past few years the least of reasons not been the Covid-19 that has severely slumped China’s otherwise skyrocketing economic trajectory.
To keep its people safe and to some extent, to show the world that it is taking all measures to prevent the mistakes of 2019 that led to the spread of the Covid-19 pandemic. Whether it is a US-Euro politically triggered compliance, or its own strong arm, China has gone over and above the general world’s response post the pandemic.
Beijing, initiated its zero-Covid-policy, characterized by widespread testing, prolonged quarantines and complete city-wide lock downs. The end result, two years down the road, is that China is reeling from an economic burden it weighed on itself.
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Now, China is closing the financial year in 2022 at its lowest economic growth rate in decades. Available data from November shows little recovery. On the contrary, the 2nd biggest economy in the world is entering 2023 drowning in an ocean of fallen exports, crippled output, failed trade and an overall economic slowdown featuring a dismal growth rate of below 3 percent.
Viewed in dollar terms, China’s exports and imports over the same period (November 2022) suffered the sharpest declines since 2020. When it comes to export and import, significant drivers of economic growth, things are not looking well for China.
With a desperate global economic outlook, China can anticipate little or no increased exports because it is unlikely that demand for its goods by the rest of the World will increase.
However, on the flip side of the coin, Chinese imports are likely to increase as the country awakens from the lock downs and restrictions which in turn means China will face poor balance of payment wrought by increased imports versus reduced exports.
However, at the moment, even domestic demand remains grim. The holidays should have been a time for increased sales but data shows that “retail sales shrank by almost 6 percent compared to the same time a year ago. Industrial output growth dropped to a six-month low with an outright contraction of production in cement, automobiles, electronic devices, and integrated circuits,” reports Tianlei Huang and Mary E. Lovely of the Petterson Institute of International Economics (PIIE).
In an article titled: ‘China’s dismal closeout of 2022’, the authors continue to paint the grim picture; “Investment growth through November further slowed as the divergence between state-led and private investment growth further widened. The property slump worsened with property investment and sales both continuing to shrink and property prices again dropping.’
Beijing, a once bustling city of almost 22 million people now looks like a ghost town though the lock downs and movement restrictions were lifted.
The Year of the Tiger, has indeed lived up to its name for china; 2022 has been as terrifying and scary as the snarl, claws and growls of a tiger. Now that the new year is at hand, China is facing very grim odds, recovery is going to be tricky. Maybe it is fitting that China is now entering the Year of the Rabbit.
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Can Xi Jinping lead China to pre-Covid trajectory?
That has been the dismal state of China’s economy and in the face of ever growing competition and adversities from the West, it is time for another great Chinese leader to lift the nation’s dampened spirits, revive its economic drive and reinstate China’s supremacy; this is going to be the year of Xi Jinping.
President Xi Jinping has been in power for three terms. In that time, he took over an economic super giant that had brought the west to grapple with the hard reality. It was no longer business as usual, Asia was here and here to stay.
What ensued is the China-US trade wars, propaganda amassed. China extended its footprint in Africa and other developing regions while the West fought hard to caution against alleged foul play in all of China’s aid, loans and grants.
Faced with allegations of been a strong armed, power hungry leader, China’s President Xi Jinping has remained composed. Until the Covid-19 pandemic broke out, China under a decade of Xi Jinping had become a force to reckon with tipping the balance of power from the west.
“China under his leadership has witnessed historic changes, with its economy more than doubling to 114 trillion yuan (16 trillion U.S. dollars), absolute poverty wiped out and moderate prosperity attained for the country’s 1.4 billion people,” writes Xinhua about Xi Jinping.
Robert Kuhn, the American author of “How China’s Leaders Think,” describes Xi Jinping as having ‘…an objective and comprehensive understanding of China’s current situation, as well as detailed and rational thinking of its future.’
“China’s recovery will depend on domestic investment and consumption,” lucky for China, the country is 1.4 billion people strong which means it has an internal market that can ferry it into the recovery period. But this is also dependent on keeping the employment rate at pre-Covid levels.
None knows this economic equation than experts in Xi Jinping team. Already the country has survived the worst of times by increasing public sector investment in infrastructure and manufacturing.
In this New Lunar Year, the Year of the Rabbit, China can be expected to hop, jump and leap out of the slowdown with consumer confidence picking up as domestic travel and movement restrictions are lifted.
The reopened movement backed with increased spending power and internal investment will spark consumer demand that will spark the recovery of retail sales and as the year progresses, the increased internal demand will transform into external demand, imports and exports will resume.
Be it direct income support to most affected households or long term strategies for domestic demand recovery, maintaining favorable foreign policies, continued aid and investment in Africa, president Xi Jinping has the team to see it through and Xi Jinping is the man to lead China back to pre-Covid trajectory.
