Next year's economic growth will be back on track as the "engine" of domestic demand

The year 2021 is a year of special importance in China's modernization drive -- the 14th Five-Year Plan has begun, and a new journey has begun to build a modern socialist country in an all-round way. What will the economy do this year? Where is the growth engine? Is China's economy still the only one in the world?

Return to "normal" growth

The year 2020 is counting down to the end. In the "extraordinary year", China's economy has delivered remarkable results to the world: it was the first to control the epidemic, the first to resume work and production, and the first to realize positive economic growth instead of negative growth.

The just-concluded Central Economic Work Conference concluded that China has become the only major economy in the world to achieve positive economic growth, and decisive achievements have been made in the three major battles.

State think tanks and analysts are predicting that China's economic growth will return to normal next year.

"This year, the Chinese economy has withstood the pressure of the epidemic, fully demonstrating the strong resilience and potential of the Chinese economy." Zhang Liqun, a macroeconomics researcher at the Development Research Center of The State Council, said China's super-large domestic market contains huge demand and economic growth is expected to exceed 8% next year.

Zhu Jianfang, chief economist at Citic Securities, thinks China's economy will grow 8.9 per cent next year, probably one of the fastest growing major economies in the world.

International organizations have recently raised their forecasts for China's economic growth next year. The forecasts of the INTERNATIONAL Monetary Fund, the World Bank and the OECD for China's GDP growth next year are 8.2%, 6.9% and 6.8%, respectively. This shows that the world has full confidence in China's economic growth.

Economic growth is mainly driven by domestic demand

What will next year's economic growth depend on? Domestic demand!

From speeding up the building of a new pattern of development dominated by the major domestic and international cycles, to sticking to the strategy of expanding domestic demand, to the "demand-side management", a series of recent central government deployments have sent a strong signal.

In recent years, consumption has been the main driving force for economic growth. However, due to the impact of the epidemic, the contribution of final consumer spending to economic growth was negative in the first three quarters of this year. That will soon change as the consumer market continues to recover.

Tang Jianwei, chief researcher at The Bank of Communications, said: "Offline consumption, such as catering, will become a major force in the recovery of consumption, which will stimulate the overall consumption growth rate to recover significantly to around 13 percent next year. Consumption's contribution to growth is expected to rebound to more than 60 per cent."

"Internal drivers such as private consumption and manufacturing investment will be the main engines of China's economic growth next year." Xing Ziqiang, Morgan Stanley's chief China economist, expects real growth in personal consumption to jump from minus 1% this year to 12% next year, potentially boosting GDP growth by 6.7 percentage points.

Global manufacturing investment has been hit hard by the epidemic this year, and China's manufacturing sector has not been spared. At present, the year-on-year growth of real estate investment and infrastructure investment has changed from negative to positive, but the manufacturing investment is still negative. In Mr Tang's view, improved demand, faster production and better profits will all lead to a sharp rebound in manufacturing investment. After two years of low growth, manufacturing investment growth is expected to rise to about 13.5 per cent next year.

To inject strong impetus into the global economic recovery

The steady recovery of The Chinese economy has added a bright spot to the global economy this year, and the sustained recovery of the Chinese economy will inject strong impetus into the global economy next year.

Deputy director of the institute of Chinese Academy of Social Sciences industrial economy xue-song li said that China's successful control of the epidemic, under the condition of negative growth in the global economy was the first to return to growth, not only provided a motivation and support for the global economic recovery, also for the domestic consumer market to speed up the recovery and growth, to lead and drive the international consumer provides a solid foundation.

Zhu jianfang said That China is expected to continue to play its role as the "engine" of global economic recovery next year, and the contribution of China's economic growth during the epidemic prevention and control period to the world is even larger than that during the global financial crisis in 2008.

The oecd said in its latest Global Economic Outlook that the global economy is set to grow by 4.2 per cent in 2021, with China contributing more than a third of global growth.