BEIJING: A top Chinese official warned on Tuesday that China’s economy faces multiple challenges at home and abroad this year, including “huge” pressure from uncertainty over global trade and from still-lackluster domestic consumption.
Foreign trade, which helped drive the world’s second-largest economy last year, will be confronted by uncertain external demand and a high statistical base from 2021, said Commerce Minister Wang Wentao.
“This year, the pressure on foreign trade will be huge and the situation will be very severe,” Wang said at a press conference.
Labor shortages and high raw material costs have also heaped pressure on the ability of China’s small and medium-sized companies to handle overseas orders, he said.
Given the global uncertainties, China must “do everything possible” this year to spur domestic consumption, Wang said.
Last year, the Chinese economy rebounded with its best growth in a decade, helped by robust exports and a resulting record trade surplus. But there were signs that momentum was slowing on weakening consumption and a domestic property downturn.
In December, retail sales grew 1.7% from a year earlier, missing an average forecast of 3.7% and slowing from November’s 3.9% gain.
Some recovery momentum was seen in consumption in February after downward pressure since the fourth quarter, Wang said.
Stability in all aspects of society is the watchword in China this year as the Communist Party gathers for a once-in-five-year congress in late 2022. President Xi Jinping is expected to claim his third term as leader of the party.
China will aim to broaden access to its markets and draw more foreign investment into the country’s industrial sector, including advanced manufacturing and strategic new industries, Wang said.
Foreign direct investment grew in the double-digits in January-February, he said.